Ask a storekeeper how many cartons of an item are in the godown and you may get three answers: the figure on the computer, the figure in his register and the figure he believes. He acts on the third. That is not a software fault. It means that somewhere between the gate and the shelf, goods moved and no record moved with them.
Why stock figures drift
Stock in any system is the opening balance, plus everything in, minus everything out. The arithmetic never fails. What fails is the list of movements. A sample handed to a salesman, a damaged carton set aside, goods lent to the shop next door, a free replacement sent to an unhappy customer: each of these is real, and none of them had a document. After some months the system describes a godown that no longer exists.
Inventory management software starts with documents
The first rule is that nobody can type over the stock figure. It changes only through documents, and each kind of movement has its own.
| Movement | Document | What it changes |
|---|---|---|
| Goods arrive from a supplier | Goods received note against the purchase order | Stock up, supplier's balance up |
| Goods go to a customer | Delivery challan or invoice | Stock down, customer's balance up |
| A customer sends goods back | Sales return | Stock up, customer's balance down |
| Goods go back to the supplier | Purchase return | Stock down, supplier's balance down |
| Goods move between godowns or branches | Transfer out and transfer in | One location down, the other up |
| Samples, damage, expiry, own use | Issue or write-off with a reason | Stock down, cost recorded under that reason |
| A count differs from the system | Stock adjustment approved by a manager | Stock corrected, with a trail |
The adjustment is the dangerous one. If anybody can adjust stock, any loss can be made to vanish. Limit it to one or two people, and print the month's adjustments for the owner.
Godowns, locations and bins
A stock figure without a place is half a figure. At the least, each godown, shop and van is a separate location, so the system can say where the cartons are and not merely how many exist. Inside a large godown, racks or bins can be added so that a new storekeeper finds an item without asking. Keep separate locations for damaged goods and for stock held for a customer, so that neither is promised to someone else. Do not go finer than your staff will maintain: a bin system nobody updates is worse than none.
Units and conversions
Goods are bought in one unit and sold in another: cartons in, pieces out; rolls in, metres out; drums in, litres out. If the system holds a single unit, someone converts by hand at every entry and errors follow. Set a base unit for each item, normally the smallest you sell, and define the larger ones against it, such as how many pieces make a carton. Purchases can then be entered in cartons and sales in pieces, with reports in either. Where the pack size differs between suppliers, record the conversion on the purchase and not only on the item.
Cycle counts in place of one annual count
The yearly stock-take closes the godown, produces a long list of differences and explains none of them, because the cause may be many months old. Cycle counting spreads the work out. Each day the system lists a small number of items; the storekeeper counts them and enters the result; differences are looked into the same day, while the documents and the people are at hand. Fast-moving and costly items come round more often than slow, cheap ones. Over the year everything is counted, some of it many times, and the godown never closes.
Stock in transit between branches
When one branch sends goods to another, there is a period when they are on neither shelf. If the transfer is a single entry, the receiving branch shows stock it has not yet seen, and may sell it. Record it in two steps. The sender's transfer out moves the goods to an in-transit location. The receiver's transfer in, entered after counting what arrived, moves them onto its own shelf. Anything short stays in transit, with the driver's name against it, until it is explained. Our guide to multi-branch software takes this further.
Getting the figure right, and keeping it right
Tidy the item list
One name and one code per item, with units and conversions agreed. Merge the duplicates.
Mark the locations
Label godowns, racks and the damaged-goods area the same way in the building and in the system.
Take one full opening count
Enter it by location on a day when nothing is moving.
Close the side doors
From that day nothing enters or leaves without a document, samples and replacements included.
Start cycle counts in the first week
A short list each morning, with differences explained before the day ends.
A shop with a few dozen items and one owner does not need this much; a notebook and a monthly count will do. Once there is a godown, a storekeeper and credit customers, inventory is normally the first module of an ERP software project, and our guide to moving from Excel to an ERP explains how the opening figures are brought across. See how stock by branch works for retail, or book a demo and we will set up your own items and godowns.
Questions people ask
What is inventory management software?
Software that records every movement of stock through documents and keeps a running balance per item and location. It shows what you have, where it is, what it cost and what needs reordering.
Why does my stock never match the system?
Usually because goods moved without an entry: samples, damage, replacements or transfers recorded late. Tightening the documents and counting a few items daily closes the gap faster than changing software.
What is cycle counting?
Counting a small set of items every day instead of everything once a year. Differences are investigated while the cause is recent, and the business does not have to close for a stock-take.
Can the software handle cartons and pieces for the same item?
Yes. Each item has a base unit and conversions to larger units, so you can buy in cartons, sell in pieces and report in either.
How much does inventory management software cost?
It depends on the number of locations, users and items, and on whether purchasing and sales are included. Operix does not publish prices; ask for a written quote.