Keeping track of inventory can be one of the most challenging aspects of small business management. If your business has inventory and you’re not quite sure how to keep it simple and organized, here are a five ways to simplify your inventory process and cut unnecessary costs in the warehouse.

1. Determine Who Decides When to Replenish

One of the best things that you can do is to choose someone who is responsible for ordering more inventory when a replacement is needed. When you get down to a certain level, more inventory has to be purchased. If you don’t have one person or a team who is responsible for giving more inventory coming, you’re going to run into problems. When no one is sure who’s supposed to do it, excess inventory can be ordered, or you couuld run out of inventory when orders come in.

2. Break Stock Into Different Categories

When you have inventory, it’s easy just to lump it all into one category. However, if you want to make things easier, it is better to divide it into three different categories. For instance, create a safety category, a replenishment category, and an excess category. Then when each category gets low, you’ll be able to make smarter decisions about when to order more. If you’re still tracking your inventory manually with paper, it’s time to make the switch to some type of inventory managemet software that works for your company. It need not be expensive, but go paperless and watch how much easier it becomes to track and monitor your inventory.

3. Watch the Safety Stock

If you really want to avoid problems, recalculating your safety stock on a regular basis is advisable. If you lose part of your safety stock, you may end up with mad customers or other issues. Have someone recalculate how much safety stock you have. Create a system that has room for error, but don’t get so much product on hand that you can’t use it.

4. Make Excess Stock Visible

One of the biggest problems that many companies run into is selling off excess stock. It just sits in the warehouse for months or years and no one ever sells it. If you want to get rid of your excess stock, you have to make it visible to your sales staff in some way. Put it right out front. Offer some kind of a promotion for selling it, and plan to avoid any issues with any excess inventory in the future.

5. Determine Root Causes

Instead of just looking at the stock levels, it’s also good idea to try to determine the root causes of why your inventory does what it does. If one item flies off the shelf while others just sit there endlessly, you need to determine why. This way, you can try to pick better items for your stock in the future. This can eliminate unnecessary purchases and help you get through stock faster.

If you’ll implement these changes in your business, you will be able to get lean and become more efficient overall.