How can you simplify inventory management challenges with online rental software?
Inventory management – risks and challenges involved
Poor inventory control practices pose, perhaps, one of the biggest threats to rental businesses worldwide. But how is a single dysfunction of an organization capable of such disastrous effects? The reason behind this is simple. Your inventory is your capital stock; which means years of investment. Every type of investment has an expected rate of return, which can be maximized if the right business strategies are used. Some of the common business failures regarding inventory management include:
- Absence of real-time tracking: Sometimes, companies do not maintain records of their inventory. Lack of information means that you cannot track movement of assets. This leads to increased poor order management, risk of theft, misplacement and stock damage.
- Failure to take into account useful asset life: Depreciation plays an important role in the utilization of inventory items. Asset lifecycle management gives you the opportunity to schedule maintenance. By doing this, you can avoid frequent equipment breakdowns and repair costs. When you fail to account for depreciation, you are most likely to end up with incorrect audit statements as well.
- Inability to manage asset stock: One of the basic rules to inventory control, is to maintain the right quantity and quality of stock. Not being able to do this can have serious consequences for your business. Shortage and excess inventory are both equally harmful.