Significance of Inventory Management

Built For

Logo of Intuit QuickBooks, which works with Acctivate, a software that understands the significance of inventory management
Significance of Inventory Management in Business
Today’s businesses, regardless of size, understand the significance of inventory management to their business and their bottom line.

The significance of inventory management

Businesses and their processes have come a long way since traditional mom-and-pop shops were established; now, modern small and medium-sized businesses have evolved into competitive counterparts to the larger big-box retailers and chain stores through the use of technology.

Technology’s relationship to the significance of inventory management

Technology has also created some interesting opportunities — and challenges — for the modern business, those big and small. In Logistics Management’s Annual Warehouse and Distribution Center (DC) Operations Survey, three trends in the survey found that modern businesses dealt with:

  • Increased e-Commerce and omnichannel sales; 6% more businesses added e-Commerce within the past year
  • Increased number of SKUs; Average number up from 11,840 to 14,306
  • Increased inventory turns
Significance of Inventory Management for the modern business
Significance of inventory management with increased SKUs

What’s interesting to note is that the increased number of SKUs and inventory turns were a result of increased e-Commerce and omnichannel involvement. Just as it appears that technology has caused a potential challenge for businesses, emphasizing the significance of inventory management, technology has provided a solution. Don Derewecki, senior consultant for supply chain and logistics consulting firm, St. Onge Co., explains that…

The encouraging thing is that companies are getting things done by employing more technology… Today’s operations are well beyond the simple manual environments that many industry veterans started out with.”

Understanding the significance of inventory management

With the increase in e-Commerce and omnichannel sales, as well as a higher number of SKUs and inventory turns to manage, businesses must understand the significance of inventory management. Inventory management plays a critical role in the health of a business because sales, purchasing, and other areas of business are affected by inventory management — just as inventory management is dependent upon the smooth operation of sales, purchasing, etc. Each of these “pieces” of business are interconnected with the other areas.

Significance of inventory management and S&OP

The utilization of technology is important for inventory management

Significance of inventory management and technology

Pen and paper worked for the small businesses of decades past. Spreadsheets worked for the small businesses of decades past, too. But what works for the small and medium-size businesses of today when the inventory challenges include omnichannel/e-Commerce, thousands of SKUs, and high amounts of inventory processing?


In fact, certain technology exists specifically for inventory management purposes — inventory management solutions. However, many inventory management solutions exist, and sifting through all the solutions on the market becomes a daunting task. With inventory management becoming increasingly important, finding the right solution to handle inventory management also becomes increasingly important.

Let’s review the inventory challenges facing modern businesses discussed above and what those challenges will require of an inventory management solution.

The significance of Inventory Management for solving today’s business challenges

Challenge: Increased e-Commerce and omnichannel sales

Requirement: An inventory management solution will need to be able to handle sales from multiple channels in an integrated manner.

Analysis: Many businesses receive orders from a variety of channels: phone, web store, Electronic Data Interchange (EDI), etc. In order to effectively manage inventory with sales coming from a variety of channels, the inventory management solution must be able to keep track of sales regardless of the channel.

A phone order that’s been entered in by a salesperson is just as important to see as an order that comes from the web store or an EDI transaction from a Big Box Retailer. If the inventory solution is able to effectively manage these channels, then inventory information is kept accurate, up-to-date, and easy to manage.

Challenge: Increased number of SKUs

Requirement: An inventory management solution will need the potential to store an unlimited number of products.

Analysis: A viable inventory management solution will accommodate for growth. Therefore, a solution should be able to handle a growing amount of customers, vendors, inventory, etc. Since your inventory database will grow as the number of products you carry expands, the solution should be able to adapt as your business grows its inventory.

Challenge: Increased inventory turns

Requirement: An inventory management solution will need to keep comprehensive and detailed inventory data.

Analysis: With increased inventory turns comes increased inventory data. When inventory turnover increases, the amount of information about the inventory sold, purchased, and kept on-hand also increases. However, the information will need to be as thorough as possible, especially if products need to be tracked for quality assurance or regulatory purposes. By having an inventory management solution that keeps detailed records, you are able to go back and look at specific product information, and even filter it by certain criteria such as by SKU, serial or lot number, etc.

The significance of inventory management for putting the pieces of the supply chain together

In review, an inventory management solution must be able to:

  • Handle omnichannel sales
  • Allow your business to have unlimited inventory data
  • Keep detailed inventory information

Is there a solution that can accomplish these three critical inventory management requirements for small and medium-size businesses?

Yes — Acctivate QuickBooks Inventory Management Software.

Significance of inventory management and the right inventory software

Acctivate is equipped to:

In addition to these features, Acctivate is capable of much more, giving your business the solution it needs to effectively tackle the modern-day supply chain challenges. Some of the other valuable inventory features Acctivate provides include:

Discover Acctivate
Acctivate is packed with features for your entire business. Talk to our team of product experts and see if Acctivate is right for your business.

Call us at 817-870-1311