What is Barcode Inventory System Software?

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Lauren Stine, Onboarding Manager of Acctivate Inventory Management Software answers: What is Barcode Inventory System Software? and discusses:
Lauren Stine, Onboarding Manager, answers, "What is barcode inventory system software?"
Lauren Stine, Onboarding Manager, answers, “What is barcode inventory system software?”

Keeping track of inventory efficiently is more crucial than ever. Many businesses are looking to barcode inventory system software to assist with this critical function, streamlining operations and boosting accuracy in the process.

But what exactly is barcode inventory system software, and how does it work? In this article, we’ll explore the basics and benefits and show why barcode inventory system software is a must-have tool for modern inventory management.

What is a Barcode Inventory System?

A barcode inventory system is a technology-driven solution designed to simplify and improve businesses’ inventory tracking and management. At its core, this system uses barcodes—unique, machine-readable patterns of parallel lines and spaces—to label and identify items.

The essential components of a barcode inventory system include:

  • Barcode Labels: These are printed labels containing each item’s unique barcode. They can be attached to products, shelves, or even entire pallets.
  • Barcode Scanners: These devices read the barcodes and transmit the information to the inventory management software. Scanners can be handheld or fixed, and some are ruggedized.
  • Inventory Management Software: This software processes the data collected by the scanners, allowing you to track inventory levels, manage stock, and generate reports.

By integrating these components, a barcode inventory system provides a seamless way to monitor inventory, reduce errors, and increase efficiency. Whether you’re tracking raw materials, finished goods, or anything in between, this system can help ensure you always know exactly what’s in stock and where.

How Does Barcode Inventory System Software Work?

Hands applying barcode labels to boxes representing how a barcode inventory system software works with barcode generation

Understanding how barcode inventory system software works can demystify the process and highlight its efficiency. Here’s a step-by-step look at how it functions:

Barcode Generation

Every item in your inventory is assigned a unique barcode. The inventory management software generates these barcodes and prints them onto labels, which are then affixed to the corresponding products, bins, or pallets.

Barcode Scanning

When an item enters or exits your inventory, a barcode scanner scans its barcode. The scanner reads the barcode, which contains information about the product, such as its ID number, description, and location.

Data Capture

The scanned data is instantly transmitted to the inventory management software. Depending on the scanner and system setup, this transmission can occur via a wired or wireless connection. The software captures and processes this data in real time.

Inventory Update

Barcode scanner laser scanning a barcode for a barcode inventory system software interpret

Once the software receives the scanned data, it updates the inventory records. This includes adjusting stock levels, noting the item’s location, and updating its status (e.g., in-stock, in transit, sold). These updates ensure that your inventory records are always current and accurate.

Real-Time Tracking

The system tracks inventory in real time. Managers and staff can quickly see current stock levels, track the movement of items within the warehouse, and monitor orders. This visibility helps prevent stockouts and overstock situations.

Reporting and Analytics

Barcode inventory system software includes robust reporting and analytics tools. These tools allow you to generate various reports, such as inventory levels, sales trends, and restocking needs. Analytics help identify patterns and improve forecasting.

Automation and Alerts

Barcode inventory system software automates many routine tasks, such as issuing reorder alerts when stock levels fall below a certain threshold. It can also send alerts for important events, like when a shipment has arrived.

By leveraging these steps, barcode inventory system software reduces errors, streamlines inventory management, and increases productivity. It transforms the often-tedious task of inventory tracking into a smooth, automated process, allowing businesses to focus more on growth and less on managing stock.

Benefits of Using Barcode Inventory System Software

Implementing barcode inventory system software can revolutionize how your business handles inventory management. Here are some of the key benefits:

Improved Accuracy

Manual data entry is error-prone and can cause costly mistakes. Barcode scanning drastically reduces these errors by ensuring accurate data capture every time an item is scanned. This accuracy is crucial for maintaining reliable inventory records.

Person scanning boxes with scanner tethered to computer with barcode inventory system software

Enhanced Efficiency and Productivity

Barcode inventory systems streamline the process of tracking and managing inventory. Scanning barcodes is quick and easy, reducing staff time on inventory-related tasks.

Reduction in Human Error

Human errors can lead to stock discrepancies, lost sales, and unhappy customers. By automating data capture, barcode systems minimize the risk of such mistakes, ensuring more reliable inventory control.

Cost Savings

The accuracy and efficiency of barcode systems can lead to significant cost savings. By streamlining processes and reducing errors, businesses lower labor costs and minimize losses due to stock discrepancies or overstocking.

Better Inventory Control and Management

With real-time updates and accurate tracking, businesses can maintain optimal inventory levels. This improved control helps prevent stockouts and overstock situations, ensuring that the right amount of stock is always on hand to meet customer demand.

Faster Audits and Stock Counts

Barcode systems make inventory audits and cycle counts much faster and more accurate. Scanning barcodes is significantly quicker than manual counting, reducing the time and effort required for these tasks.

Improved Visibility and Reporting

Barcode inventory software’s robust reporting and analytics tools provide valuable insights into inventory levels, turnover rates, and sales trends, helping businesses make informed decisions and improve forecasting.

Enhanced Customer Satisfaction

Accurate inventory management ensures that items are available when customers need them. This reliability can improve customer satisfaction, encourage repeat business, and generate positive reviews.


Barcode inventory systems are scalable and can grow with your business. Whether an online retailer, a mid-sized distributor, or a large manufacturer, these systems can be adapted to meet your evolving needs.

Enhanced Security

Barcode systems improve security by tracking the movement of goods within the warehouse. This visibility can deter theft and ensure that only authorized personnel access inventory and other business records.

Barcode Inventory System Software Case Study: Driven Racing Oil


Driven Racing Oil products scanned with barcode inventory system software

Driven Racing Oil, originally Joe Gibbs Racing Oil, was founded after Joe Gibbs Racing’s impressive success in winning three Sprint Cup championships. Joe Gibbs Racing decided to explore different oils to boost their race cars’ horsepower, and after years of testing and racing, they made their high-performance oil available to the public.

The company’s growth has been as rapid as its race cars. “People are going nuts over this stuff!” Pollock said. “It’s all about horsepower and reliability, that’s the biggest thing that our oil products offer to everybody.”

Implementing Acctivate for Inventory Management

Driven Racing Oil needed a robust inventory management solution to keep pace with its rapid growth. After evaluating several options, they chose Acctivate.

Before switching to Acctivate, Pollock described their inventory management as cumbersome: “We used QuickBooks and we used a lot of Excel files.”

The transition to Acctivate was smooth and efficient. Pollock noted, “We were looking for something that was easy and functional and that wasn’t going to take a programmer to come in and customize it. It was pretty much done over the phone and easy to install and that’s basically why we chose it. It allowed us to have it up and running within a month, where most of the other companies, it was going to be at least two months of trial and error.”

Barcoding and Mobile Capabilities

One of the standout features of Acctivate for Driven Racing Oil was its barcoding and mobile capabilities. These features significantly improved the performance and accuracy of their two warehouses.

“Barcoding is one of the best features and one of the main deciding factors for choosing Acctivate. We have a warehouse here and we have one in Colorado that uses the handheld device. It has simplified the work and made all of the mistakes that we were having disappear,” Pollock explained.


Since implementing Acctivate, Driven Racing Oil has significantly improved its inventory management.

“The biggest change we’ve seen since switching to Acctivate has been the live timing with inventory and just being able to actually see what we have in our two warehouses. I know with QuickBooks it was a little bit deceiving at times and we were always running into problems. In the past we were able to see our inventory, but we were not able to see ‘live inventory’ of what was in stock at that specific moment,” Pollock said.

With Acctivate, Driven Racing Oil has achieved real-time inventory visibility, ensuring they always have accurate, up-to-date information across their warehouses. This has streamlined their operations, reduced errors, and supported their continued growth in the high-performance oil market.

Find Out More!
Learn more about Acctivate Inventory Software by connecting with our product experts.

Call us at 817-870-1311

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