Managing inventory is the foundation of a well-functioning business, regardless of its size. This process encompasses different tasks:
- Financial reporting: generating reports on the financial situation, output, and sales, is useful for insights into the financial health of the business.
- Multi-channel inventory tracking: tracking inventory across different sales channels is challenging but crucial in today’s market, as it helps to monitor and adjust stock levels to fulfill orders from different sources.
- Optimising inventory levels: maintaining the right stock balance is important to prevent understocking and overstocking, as well as unnecessary capital tie-ups.
- Demand forecasting: being able to predict how much stock is needed is crucial to make sure the right budget is invested in product ordering and to prevent understocking or overstocking situations.
To accomplish these tasks effectively, businesses rely on inventory reports. In this article, we will find out what inventory reports are and how they help to optimise inventory management.
What is an inventory report?
An inventory report is a physical or electronic document that shows how much inventory a business has in stock during a specific timeframe. It highlights the amount of sellable inventory, inventory that needs to be ordered, or inventory necessary for internal use. Having clear inventory reports is crucial to make sure you always have the right amount of stock, especially when people are buying online across different sales channels.
Why is inventory reporting useful?
Inventory tracking in warehouse
Tracking SKUs by inventory storage location prevents lost inventory and enables extremely accurate counts, preventing unnecessary reorderings, lost or misplaced items, as well as a more efficient fulfillment. This is particularly useful when dealing with multiple suppliers and supports compliance with methods like FIFO.
In a functioning and efficient warehouse every product must be tracked and categorised under received items, stocked, picked for shipping, packed and shipped to the end-customer. Inventory reports that record whenever there are changes in these categories avoid a lot of costly damages to the business, like misplaced items or inaccurate management issues.
Inventory reporting is also used to plan product restockings. In fact, especially for businesses who have high volumes of online orders, it is crucial to ensure that products don’t run out before they have to be fulfilled, a situation which can lead to many lost sales.
Accurate inventory reporting allows you to know exactly when products need to be replenished, enabling to stock items proactively and even to understand how much stock is needed to meet demand based on historical data.
Different types of inventory reports
There are various types of reports that cater to different business needs:
Inventory value report: this report records how much money is invested in inventory during a specific timeframe, ensuring cash flow is managed in the best possible way. furthermore, it offers warehouse-specific inventory values for optimized inventory distribution and avoids keeping too much stock in one location.
Inventory performance report: this report offers an overview of product sales during a specific timeframe, highlighting SKU velocity, inventory turnover, and growth. This allows businesses to identify best-performing products and slow-moving items, for better data-driven, strategic decision-making.
Inventory forecasting report: this type of report bases its insights on historical order data to identify sales patterns, which can be seasonal, regional, or trend-driven. In this way, businesses can calculate the optimal procurement quantities for each product, ensuring these meet forecasted demand. Procuring enough stock to prevent stockouts during high-demands periods is essential to capitalize on trends successfully.
Fulfillment reports: fulfillment and shipping reports are fundamental to understand how efficient order processing and delivery operations are. These reports provide valuable insights to understand and improve efficiency, like setting delivery times to meet expectations, improving budgeting and assessing profitability. Some of them are:
Average Fulfillment Cost: average cost to pick, pack, and fulfill each order.
Average Fulfillment Speed: average time it takes to process and ship an order from the moment it’s placed.
Average Shipping Times: average time it takes for orders to reach end-customers.
Average Shipping Costs: average costs for shipping orders to customers.
Distribution Impact: calculates optimal distribution of inventory across different fulfillment centres to reduce average shipping costs and transit times.
eLogy simplifies inventory reporting and distribution
Multi-warehouse approach: with eLogy you have access to a network of strategically located warehouses to position inventory closer to end customers. In this way, you can easily gain global reach, while always offering exclusively fast shipping times at reduced costs.
Integration with e-commerce stores and fulfillment centres: eLogy integrates easily to your e-commerce store, enabling real-time synchronization of inventory data, making sure inventory levels are always up-to-date and accurate across all sales channels and distribution centres.
Automation: all tasks of inventory management and reporting are automated with eLogy, reducing risk of errors and enabling faster processing times.
Accuracy and transparency: thanks to eLogy’s real-time inventory reporting, you can rely on accurate and transparent insights into your inventory levels, sales trends, and order status for more accurate forecasts and data-driven decisions.