Being out of stock means that you don’t currently have any of a particular item available for purchase. This problem for business owners typically happens because someone in the purchasing department does not order enough inventory to satisfy customer demand.
Preventing Out of Stock Situations
Luckily, becoming out of stock can be prevented with purchase order software. Cloud-based inventory management systems let you easily track your inventory in real-time so that you know exactly what you have in stock and when you need to reorder products.
Consequences of Running Out of Stock
Let’s take a look at the consequences of running out of stock and see how your purchasing software can help avoid them.
Lost sales
When you run out of stock, a customer can’t purchase it from you. If a customer can’t purchase from your business, you have lost a sale. If you have a huge demand for a product but run out of stock, you will lose multiple sales.
Lost customers
Ultimately, lost sales lead to lost customers. When someone visits your website and attempts to make a purchase that they can’t complete because you are out of stock, they will go somewhere else for a similar product. We live in a time where people want their e-commerce products delivered quickly. If you can’t deliver on that, they will take their money elsewhere, and potentially never come back.
Bad customer reviews
If you run out of stock, your customers will lose the trust they had for your business. You can also expect some negative reviews on your website or social media page. Word of mouth is one of the most tried-and-true marketing techniques because customers rely on one another’s opinions before making a purchase. This is especially true when it comes to e-commerce.
Declining business growth
When word of mouth spreads, particularly negative word of mouth, you can expect a decline in sales, which leads to a decline in growth. Customers will not want to purchase from someone with bad reviews, and the worse it gets, you can expect fewer and fewer customers.
The Solution: Automation
Automation is key for preventing problems associated with being out of stock. Many businesses already use automated systems, which make the purchasing process easier and help to save time.
QuickBooks users can experience even greater efficiency and productivity when they integrate with Bellwether’s robust purchasing software.
Integrating e-procurement solutions with QuickBooks purchase order software will drastically improve all areas of the procurement function. Users can pull down these items into ePMX:
- Vendors
- G/L Accounts
- Classes (Job Codes)
- Projects
- Terms
- Currency
When integrated, users can enter invoices into ePMX, do a 3-way match with PO, receipt, and invoice, and bridge the invoices into QB for quick payment. All of these tasks save time and help the business run more smoothly.
In order to understand how a PO system can help you avoid out of stock solutions, we must first understand why businesses run out of stock.
Why Did Your Business Run Out of Stock?
Running out of stock is a problem many businesses face, especially if they don’t have a refined procurement process in place. Here are a few reasons why you may run out of stock.
Inaccurate Data
In order to know what you have in stock and what you don’t so that you can make effective purchasing decisions, you’ll need to rely on data. Inaccurate data will always lead to poor purchasing decisions and cause your business some distress.
Product Ordering Gone Wrong
Inaccurate data will lead to ordering the wrong quantity of product. It may even lead you to order the wrong product altogether. If you don’t order enough product, you won’t keep up with demand, which means you will lose sales.
Manual Processes
Your inaccurate data, which is the basis for the procurement process, must have come from somewhere. If you are using spreadsheets or a paper-based system, the odds are that human error is what leads to inaccurate data.
Cloud-Based Purchase Order Management Software
As you can see, the result of using manual purchasing processes can have a butterfly effect on your entire business. Procurement software can completely eliminate the risk of running out of stock and help keep your business successful and with happy customers.
Eliminate Manual Processes = Better Procurement
By eliminating spreadsheets, your purchasing process is no longer prone to human error. That means no more data inaccuracies that force you to make bad purchasing decisions. When this risk is mitigated, you can expect a smoother and more efficient purchasing function.
Efficiently Managing MRO Inventory
MRO inventory differs from traditional inventory because it lacks the same controls or practices. It is not typically measured in terms of inventory on hand or usage. Here are a few of the challenges of managing MRO inventory:
- Supplies required for MRO tasks are in-stock but can’t be located
- Items required for MRO are bought with immediacy, ignoring the price in favor of availability
- Expedited shipping costs more
How Can Procurement Software Help Manage MRO Inventory?
Purchase order software can help you do the following much easier, and in less time:
Track, Manage, and Control MRO inventory
To improve the MRO procurement process, you’ll need to track and manage your MRO inventory more effectively. Procurement solutions will help you more easily track items that can frequently get lost and lead to unnecessary spending.
Faster Purchase Requisition Approvals
When you need an item immediately, the process can get bogged down by the approval process. With cloud-based solutions, you can set certain criteria that allow MRO supplies to be purchased immediately.
Delivers Valuable Data
Predicting when you’ll need certain MRO items will help the entire procurement process run more smoothly. E-procurement solutions will give you easily digestible data that allows you to be proactive instead of reactive.
Reduce the Number of Suppliers You Work With
Tracking the performance of your suppliers may not be part of your procurement process. However, by determining which suppliers work best with your business, you can cut the number of suppliers you work with to improve regular business functions and improve relationships with them.
Improve Budgeting
Purchasing software saves your employees time, which saves you money. Also, by reducing unnecessary spending, you’ll have more money to put into beneficial business tasks, like marketing and human resources.
By knowing which items you have and which you’ll need soon, you can reduce the immediacy of purchasing MRO supplies that are either in stock and lost or need to be replaced. This means cheaper delivery charges since you won’t need products the next day.
Purchase order system software will improve your entire business, helping you save and make more money each day.
