How much have we got – and where is it right now? A good inventory management software system can answer that question immediately. However, if you want to optimise inventory, check whether its value matches your financial reports, or open it up to your suppliers. Inventory management needs to be integrated with your back-office systems, otherwise, it’s a lot of time-consuming and manual work.
Why Inventory and Back-Office Systems Need to Be Integrated
Integrating inventory management with back-office and accounting systems gives you a competitive edge. It reduces the costs and errors associated with manual processes, improves your planning and helps you work more efficiently with suppliers.
The 3 Key Benefits of Integration
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Accurate reporting
Because inventory is often a major share of your asset base, its recorded value needs to line up with what you physically hold. The only reliable way to ensure your financial statements reflect this is to have inventory transactions feeding straight into your back-office chart of accounts.
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Optimised inventory
Having the correct range and quantity of stock available is essential for keeping both customers and investors satisfied. Customers expect new products whenever they need them, while investors don’t want to see working capital tied up in inventory. Managing these opposing pressures is difficult. Holding surplus stock creates costs that go beyond the original materials and labour required to produce it.
Tasks like storing, counting and reworking stock demand further working capital and can even limit the availability of items customers are looking for. Optimising stock levels depends on your sales order, purchase order and planning systems having real-time insight into your inventory.
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Supply chain visibility
A growing number of businesses depend on external supply chain partners to control stock levels and handle customer deliveries. For this setup to run smoothly, the inventory platform must connect, not only with the company’s own back-office tools, but also with the systems used by suppliers and third-party logistics (3PL) providers. When suppliers have a clear view of how your stock positions shift over time, they can make sure their products reach your warehouse or 3PL operation in time to support customer demand.
What best-in-class inventory management looks like:
- Real-time. This way, customers and supply chain partners have the best possible visibility into your inventory, and your financial reports are always accurate and up-to-date.
- Flexible and transparent. Users need the integration to adapt automatically to changes in business processes, so they can carry on their day-to-day work without worrying about it.
- Scalable. The integration must be able to cope with growth in transaction volumes.
How to Integrate Inventory Management Software
The most straightforward approach is to adopt an ERP platform that already includes an inventory module suited to your operations. When that isn’t an option, the next strongest approach is to use an inventory application and an ERP system that were each built with open, flexible APIs from the outset.
If suitable open-API systems aren’t available, integration is still possible. But it’s unlikely to run in real time and will need ongoing adjustments whenever vendors update their software. You can even rely on manual updates and reconciliations to keep data aligned, but given today’s rapid pace and tight margins, that sort of workaround won’t remain viable for long.
Get on Top of Inventory Management With NetSuite
Turn inventory into a strategic advantage with NetSuite Inventory Management Software. With a single source of truth, every inventory transaction flows directly into your financials, improving reporting, tightening controls and enabling smarter planning. Businesses optimise stock levels to satisfy customer demand without tying up working capital, while giving suppliers and 3PLs the visibility needed to keep goods moving.
As part of a unified ERP, the software integrates inventory management with back-office systems to deliver accuracy from the warehouse to the balance sheet in real time. It provides company-wide real-time inventory visibility, demand-based planning and intelligent fulfilment to reduce COGS, prevent stockouts and cut excess stock. Built-in multi-location fulfilment, replenishment and cycle counting scale with your growth, eliminating spreadsheets and manual reconciliations, so businesses can boost profitability while delivering a seamless buy-anywhere, fulfil-anywhere experience.
