Disadvantages of Excel For Small Business Inventory Management

Excel is the most widely used spreadsheet software and offers a range of functionalities that is suitable for businesses in most cases. However, for small business inventory management, it has many disadvantages as well. Inventory management gives businesses the edge they require, especially if they are a wholesaler or retailer of products. Previously, deploying software for inventory management was only possible for well established businesses. However, technology has now developed to the point where inventory management solutions are more reachable.

What is Inventory Management?

Inventory management is the process of maintaining and tracking stock. The objective is to hold as little stock as possible without suffering from a stock-out. This is because excess inventory would mean money is being tied-up in the inventory which could be used elsewhere. However, this is a general rule and may not be applicable on all items. You must understand the nature of your products and determine their price sensitivity, production, import time, and so on to accurately assess what inventory level works best for your business.

3 Major Disadvantages of Excel

Limited User Access

If you have one Excel spreadsheet maintained for inventory, you will face trouble for updating records. It can get the work done if only one person looks after inventory but if another person has to update it then they will have to manage a separate file and then update the original one.

Lacks Real-Time Functionality

Excel data cannot update as soon as an order is received or dispatched, it requires the user to manually update the records which can cause many human errors which can become a nightmare.

Lack of Reports

In order to understand the state of the business and generate reports instantly regarding most selling items, most profitable customers, and stock reorder points, businesses require a comprehensive ERP system, inventory software for small business are now cheaper than ever. Excel cannot generate these reports instantly which are important in order to grow the business in the right direction.

Conclusion

Small businesses need to take advantage of easily available inventory management software and move to the next level. By using Excel, small business owners remain worried about the daily operations, this makes them lose sight of growing their business in the long-run.

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