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Inventory is often the biggest asset a trading or manufacturing business holds — and the easiest to lose track of. Inventory management means knowing what you have, where it is, what it cost and when to reorder.
Why it matters
- Cash: stock you cannot sell ties up money.
- Sales: running out loses orders.
- Accuracy: wrong stock figures make wrong profit figures.
- Waste: expired or obsolete stock is a direct loss.
The core practices
1. Record every movement
Every stock-in (purchase, production, return) and stock-out (sale, consumption, damage) should be an entry. If it is not recorded, it did not happen as far as your numbers go.
2. Value stock consistently
Choose a method and stay with it. See FIFO vs weighted average.
3. Set reorder levels
A reorder level tells you when stock is low enough to buy again. See reorder level and safety stock.
4. Count regularly
Compare physical stock with system stock and investigate differences.
5. Track batches and expiry
For goods that expire or need traceability, track lots and expiry dates so you sell the oldest first.
6. Use barcodes
They remove typing errors and speed up counting. See barcode inventory system.
Traders vs manufacturers
Traders buy and sell the same item. Manufacturers buy raw material, make finished goods and sell those, which adds a bill of materials and production entries.
Tools
Onyx Bills includes an inventory module with nested categories, unit conversions, FIFO lots, barcodes, near-expiry reports, valuation and reorder alerts. For Manufacturing Plants, Onyx Inventory adds bill of materials and manufacturing entries, and Onyx Combo syncs sale and purchase stock entries from billing.
Frequently asked questions
What is the difference between stock-in and stock-out?
Stock-in adds quantity to inventory (for example a purchase). Stock-out reduces it (for example a sale or issue to production).
How often should I count stock?
High-value or fast-moving items more often; everything at least once a year. Many businesses do rolling cycle counts.
Is spreadsheet inventory enough?
It can work at a very small scale, but errors multiply as volume grows. Software keeps stock, costs and accounts linked.
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