Having an Inventory Management Software will help you monitor your stocks and your warehouse allocations. However, without the integration of it with your other back-office and accounting systems, your inventory will not be optimized and you will still need to do manual intervention and reconciliation just to ensure the inventory asset value on your financial reports matches what is physically in stock.
The Path to Integration
The integration begins with finding a system with an inventory management module that meets your company’s needs. Alternatively, you can also look for an inventory system and an ERP system that were both designed from the ground up with open and flexible APIs.
If these systems still does not meet your needs or are not available, you can still integrate your systems, but the integration may not be real-time and will require constant maintenance while your system providers are upgrading their solutions. For maximum benefits, your choice of integrated solution should be real-time, flexible, transparent to users, reconcilable and scalable.
Detailed Process of Integration between Inventory Software and Your Back Office
Here we will explain to you the process of integrating your inventory management software with your accounting and back-office systems.
First, inventory will be optimized to meet product availability and ROI goals. Then, there will be transparency between you and your supply chain partners regarding your inventory. Inventory statements will also be much accurate in financial reports. Here’s exactly how it happens:
Optimization of Inventory: Acing the management of your inventory on hand will ensure both your customers’ and your investors’ satisfaction since you are capable of meeting your customers’ product demands, and no working capital will be tied up in the inventory which is preferred investors. Both these objectives will be reached and the investments will be made worth it.
Having real-time updates regarding your sales order, purchase order and planning systems will enable you to plan the right amount of inventory. This will make certain business process such as storing, counting and reworking inventory quick and without any additional working capital. Therefore, the availability of products that your customers want will be left untouched.
Transparency in Supply Chain: Many businesses rely on supply chain partners when it comes to managing their inventory levels and customer shipments. To ensure success, an integration between the company’s inventory system and its back office systems including accounting is required. It should also be reconciled with supplier and 3PL, or third-party logistics, systems. As long as suppliers are aware of your inventory levels, they can ensure enough supply of their products in your warehouses or 3PL to meet customer demands.
Financial Statements Made Accurate:
Accurate annual reports and tax returns are required not only for your investors but also for the government. A significant part of your stated assets is composed by inventory value. This value recorded in your books must match the physical value in your warehouse.
Integrating the transactions in your inventory and back-office systems is the only way to ensure that your company reporting have financial integrity.
