The Value of Integrating Inventory Management and Accounting Systems

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IMGCAP(1)]What many warehouse administrators, logistic departments, small business controllers and even accounting teams may not consider is the business value realized from an integrated accounting and inventory management system.

The fact is, money is often wasted on excessive labor costs because warehouses aren’t optimized or there is no knowledge of the cash flow outlook.

If you are working with or advising warehouse managers, they should ask the following questions:

  • Does the product price vary or do you run promotions regularly?
  • Do you track inventory based on serial number, lot, date, pallet or any combination thereof?
  • Do you drop ship?
  • Do your vendors require minimum or maximum order quantities?
  • How do you decide which orders to fill, and based on what criteria?
  • Do you pick more than once a day?
  • Do you store inventory at multiple sites?
  • How often do you reconcile physical inventory?

If they answered yes to any of these considerations, your clients or customers would likely benefit from integration.
Inventory management is about knowing exactly where and how many of an item you have available. So, it makes sense in order to ensure that your inventory asset value on your financial reports matches what is physically in stock, you would integrate your inventory package and account package to align operations.


There are three key advantages to this type of integration:

1.   Optimize inventory to meet product availability and financial goals

Inventory optimization determines where in the supply chain the service levels can be set, how much manual work is required to set the service levels and whether the mix will be used by one department, or by multiple departments within the warehouse. Data capture done in real-time ensures data integrity and helps reduce the risk of discrepancies. Creating the right mix and maintaining accessible intelligence to the correct amount of inventory is vital to both customer and investor satisfaction.

2.   Provide inventory visibility to supply chain partners

Visibility allows you to see fluctuating inventory levels, including sales peaks and stagnant product. This visibility allows suppliers to ensure their product is available in the warehouse or facility on-demand. It also informs the forecasting process for cyclical inventory movement experienced year-over-year - so sourcing, holding and delivering can be executed efficiently.

3.   Accurately reconcile inventory in financial reports

Accurate financial reports can be obtained effectively through integration of inventory transactions with the back office chart of accounts. It is extremely important that these reports are exact because inventory value can be a significant portion of your stated assets. Real-time, accurate data is accessible anytime so there will be increased confidence that operations are in sync.

Manual systems reconciliation is a method of the past. An integrated solution protects your products, partners, customers and bottom line: operational insight at your fingertips.

Jason Sentell is a product marketing manager at Wasp Barcode Technologies, responsible for development and execution they company’s product marketing strategy. He has also served in product development and management roles at Insight Enterprises and i-Bankers Securities. 

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