Keeping track of your inventory can be quite the hassle. You can have tens of thousands of materials in stock. So how do you sort through all of your inventory? How do you keep track of what materials you have in stock and which ones you don’t? Is there a method for keeping track of how much of a particular material you have? Most of this information is handled through some form of data entry, but is that the best way to go about it? Let’s look at two popular methods and then take a closer look at a complete software solution.
PAPER
Some companies rely on paper to help keep track of their inventory. There are some serious drawbacks to taking a paper-only approach.
Inaccuracy: When relying on this approach, it will be up to the individual to enter in any inventory information. Mistakes can and will be made. Unless there is someone double checking or verifying what was submitted then there is a real risk of inaccurate information being entered. If you are using a paper-only approach then you are also at the mercy of an individual’s penmanship. If what was written is sloppy and hard to read, then that too can lead to mistakes.
Time consuming: The amount of time it takes to track inventory can be massive depending on your business. What if you have over a thousand unique materials in your warehouse? That’s going to take quite some time and effort to sort out. Scrolling through pages and pages of information can take up a good portion of your day.
Waste: Just imagine how much paper you will need to keep track of your inventory. There will be a lot of waste involved. Time wasted sorting through and labeling materials. Money wasted by having to constantly purchase paper. Using a paper-only approach can end up costing your business in the long run.
EXCEL
Another popular method for tracking inventory many contractors use is Microsoft Excel. Compared to the paper-only approach this method is a massive upgrade. It is relatively easy to use and cost effective. Though, unfortunately, even this method comes with a few drawbacks.
Data entry: Depending on how large your inventory is, you can be spending hours typing in materials, which prevents you from dedicating your time to more important tasks. This is especially true for growing companies. The larger your inventory becomes the more difficult it will be to manage through Excel. Even just looking through the file could prove a difficult task.
Limitations: What if your inventory moves from location to location? What if more than one person needs to access the file at the same time? These issues can really slow you down and cost a company dollars. They can also lead to errors, which in turn can cost you more money.
Lack of forecasting: With Excel you can’t track historical data like trends. So, if you have seasonal or specific inventory needs at different times of the year or want to forecast, you are unable to do so with Excel.
CONSTRUCTION ACCOUNTING SOFTWARE
The rise of construction accounting software over the past decade has made it easier than ever to keep track of your inventory. Now you have the ability to track all of your materials from a desktop. Construction accounting software has all of the tools to make tracking inventory a simple automated process. You are able to produce a complete history showing all additions and subtractions. For example, let’s say you are performing a job, all you have to do is select the materials used when filling out the work order. Those materials will then be automatically subtracted from your inventory. No need for paper or Excel spreadsheets.
Real-time data: An inventory module in construction accounting software updates in real time. With real-time data you can better forecast and make better purchasing decisions. You will be able to see just how much stock of a certain material you have at that exact moment—allowing you better access to information about your inventory.
Easy to access: Construction accounting software makes it is easier than ever to search through your inventory. What sets it apart are the categories of searches offered. You can search by material description, type of material, by particular job, and more. In a just a few key strokes you can have access to all of the information you need.
More functionality: All of the drawbacks discussed with a paper-only approach and Excel can be remedied with Construction Accounting Software. You can track material that moves to multiple locations. More than one person can have access at the same time. You can tie into other aspects like job-costing.
A decade ago if you needed information about your inventory you would have to go digging through an Excel spreadsheet or through a binder. Now you can access a database that has all of your inventory information in one place. Construction accounting software has been able to alleviate many of the difficulties of keeping track of your inventory—freeing up your staff to perform other work responsibilities. So, why not take advantage? ■
About the Author:  Eric Goldstein is the president of C/F Data Systems. With over a quarter of a century of experience in the construction software arena, Eric has led C/F Data’s ongoing development of the company’s flagship solution, STRUCTURE, a leading construction accounting platform. C/F Data Systems also develops and sells integrated project management and job-costing software. For more information, visit www.cfdatasystems.com.
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Modern Contractor Solutions – August 2016
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