Inventory Control System 101

Running a successful cannabis-based business relies on knowing what’s in your pipeline now, what’s on order and the rate of turnover. At the same time, you must make sure you are getting products into customers’ hands before their expiration dates for quality and safety. Accordingly, it’s prudent to use a state-of-the-art inventory control system.

Inventory control, otherwise known as stock control, is the art of keeping enough stock to meet customer demands while minimizing costs and preventing spoilage. Learn more about the importance of inventory control and how you can improve your business’s inventory control with the following infographic.

Introduction to Inventory Control

If you’re new to the idea of inventory control, be aware that it has to do with all components, supplies and raw materials that your business engages with. A control system gives you details about the inventory that you currently possess.

Inventory control is important for cannabis businesses because it allows you to maintain a critical balance between customer demand and your current level of in-house stock.

Keeping a watchful eye over inventory helps you adhere to quality assurance requirements, such as items that must be refrigerated, and doing shelf-reads to see what products are reaching their quality sell-by dates.

The ongoing stream of data that you accumulate from the inventory control system enables you to forecast future demand based on customer buying patterns. Such information feeds into what products will be on backorder and how much warehouse space you may require going forward.

How Owners and Managers Gain Better Control Over Their Inventory

Successful, competitive cannabis business owners know that it’s important to install the latest version of inventory control software, so they can start accurately tracking details about all the products they sell.

Ideally, you will allocate staff time to take care of inventory audits. Otherwise, how will you really know about the reliability of the data in your inventory system? You might not order enough products, disappointing customers on their next visit. Or you buy too much of an item that turns out not to be so popular and now are tasked with getting salespeople to encourage more customers to take the products off your hands.

Using a dedicated inventory control system, you can quickly see which products are the most popular among your customers and which ones tend to bring more people through your doors.

Keeping close tabs on inventory, from products to supplies, will be easier when you customize your inventory system. Working with a business compliance service or accounting firm can be useful in building out your inventory system so it works more effectively to better serve your demographics.

Cannabis Enterprises Keeping Close Tabs on the Supply Chain

It’s clear that there are many moving parts to keep track of in the cannabis space. In terms of supply chain management and watching over the flow of revenue, stock control or inventory control will always need to be top of mind.

Prudent business owners will recognize their staffing limitations when it comes to inventory control.

They’ll hire professionals for cannabis business consulting services to make sure their organization runs smoothly with less shrinkage and fewer instances of customers being disappointed because a shop has run out of their favorite products. For more tips on inventory control, please see the accompanying resource.

Infographic provided by Cannabis CPA, cannabis tax preparation

Author bio: Daniel Ladd is a founding member of Cannabis CPA and has experience providing tax planning, compliance and consulting services to closely held businesses and their owners — including C- and S-corporations, LLCs, and partnerships in a variety of commercial and professional services companies. He has extensive experience in state and federal taxation planning and compliance. Clients from the software, cannabis, high-tech, construction and real estate industries have sought Ladd’s assistance over the years.