What to do when you outgrow Excel for Inventory Management

There comes a time when virtually any business will find itself outgrowing the functionality provided by Excel. While often useful for minor administrative purposes, spreadsheets are extremely limited in their options and have significant downsides when used for inventory management.

The Problem: Why Excel Is Not Ideal for Inventory Management

Inventory management is an area that is extremely important for cataloging and analyzing your data. You need the ability to run complex reports regarding past inventory needs in order to predict consumer buying patterns. Purchasing appropriate inventory amounts – the goal of all businesses large and small – keeps the probability of future write-offs or write-downs at a minimum. It’s very difficult to cull that information from data sets in Excel due to the way Excel gathers information. An inventory management program, however, makes this data analysis much easier.

Additionally, Excel does not offer a streamlined method for reducing administrative costs, such as the ability to easily log and scan inventory using physical tools or the ability to directly import inventory data into a financial system. The most significant drawback of using Excel to track inventory is the inability to guarantee the accuracy of Excel sheets. The more hands adding, moving, or removing inventory increases the probability of error when all of that data must be captured in one spreadsheet.

Struggling? Know When Your Company Has Outgrown Excel

Many small companies may start with Excel either due to lacking alternatives or because it’s simply the easiest solution at the time. However, there are a few obvious signs a company has outgrown their Excel solution and needs to transition to a dedicated inventory management system.

Signs a company has outgrown their Excel solution:

• Losing track of inventory; having an inaccurate inventory catalog
• Spending a significant amount of time on inventory management
• Finding inventory isn’t updated on a regular basis
• Experiencing errors that cost the company time and money

Inventory tracking is incredibly important to any company. Without proper and timely inventory tracking, a company can spend significant and unnecessary amounts of money – money thrown after an ineffective inventory system.

The University of Oxford spent hours on inventory management every week using their Excel system; this was time that could have been allocated to other areas of the university. Furthermore, their Excel inventory system was not error proof and there was no significant error checking process. By implementing Wasp’s Inventory Control, the university saved their staff over four hours per week tracking inventory. Inventory data kept solely in Excel lead to costly mistakes, and there is no true protection from error.

The Benefits of Growing Out of an Excel Inventory System

Switching from an Excel inventory system does not need to be difficult; in fact, many companies find their inventory management is much faster and easier when using a dedicated system rather than using an unwieldy sequence of spreadsheets. There are many benefits to an inventory management solution such as Wasp’s Inventory Control:

• Maintain an accurate inventory count easily and end wasted time tracking down errors.
• Easily update the inventory system without having to modify multiple spreadsheets or account for other user changes.
• Project future inventory needs.
• Quickly identify inventory loss or inconsistencies.

Companies such as Ace A/C & Heating and Bay Area Air Quality Management District were able to save significant amounts of money through the adoption of Wasp’s Inventory Control instead of continuing to use an Excel sheet method. The owner of Ace, Gary Kincheloe, stated, “The product paid for itself in three weeks. Not only did I save money, I’m able to make more money without incurring the fixed costs of additional technicians.”

Switching Over: Changing Your Inventory Solution

Switching from Excel to an automated inventory management solution does not have to be difficult – it simply begins with training. Employees should first become familiar with the new inventory system before the company fully transitions to ensure they are aware of all new functions and procedures. Often, employees will be relieved to find the new inventory system is much easier and less time-consuming.

Before converting to an automated inventory solution, the existing inventory data must be verified before that data is entered into the new software. It’s often easier to begin with entirely new counts rather than relying on old numbers. Barcode labels and scanners are often the easiest method for guaranteeing a valid count without data entry errors. Due to the way information is stored in Excel sheets, there is no guarantee those totals are correct. Because of this fact, a company that begins by using their prior Excel sheet counts may start with errors already in their system.

While switching to an inventory management software may seem like an intimidating process, it’s actually much easier moving forward than trying to shoehorn an inventory process into Excel spreadsheets. Companies who switch to an inventory solution find they save both time and money and that the product pays for itself – often reaching a return on investment very quickly. Through a dedicated solution you will be able to track inventory in real-time, ensure the validity of your records, and reduce your overall administrative burden.

Author Info:
Brian Sutter – Director of Marketing at Wasp Barcode
Brian Sutter is the Director of Marketing at Wasp, responsible for the development and execution of the company’s marketing strategy. His role encompasses brand management, direct and channel marketing, public relations, advertising, and social media. He also writes and speaks on topics related to helping small business owners grow their business and improve operational efficiency.