Cloud accounting software for Amazon sellers
As an Amazon seller, you face very specific challenges in building a seamless, easy-to-use back-office infrastructure. Unfortunately, there isn’t an all-in-one solution that you can buy, configure and run. So you have to build an Amazon seller solution with the right components that work together seamlessly.
How Xero can help your business
Xero – the modern accounting solution – is at the heart of many Amazon seller businesses. We understand what it takes to run an online business. So that’s why we developed Xero in the cloud for the cloud – with the ability to seamlessly integrate with best-in-class inventory management, sales tax and other key Amazon add-ons. Plus you get powerful cashflow, bank reconciliation and payments functionality that are easy to implement and that will grow with your business.
How to create an efficient inventory management system
Inventory management can be hard for any business to do well. Whether you’re in manufacturing or retail, your business can suffer if you have too little stock – or too much. Here’s how to get it right.
Inventory is money
Inventory management can be difficult because it’s hard to predict demand. If you stock up on a particular product line but demand drops, you’ll have stock that you don’t need. And if products are lying in your warehouse for too long, that will affect your cashflow because:
- unsold items don’t generate revenue.
- warehousing costs money, and so does inventory accounting.
- stored items take up space that could be used for something else.
- stock may deteriorate or become obsolete.
- items could be damaged or even stolen.
- So the money tied up in excess inventory could be put to better use elsewhere.
On the other hand, if you don’t keep enough stock and demand then spikes, you’ll miss out on sales – and maybe even lose customers. You won’t be able to fill big orders and you’ll have to scramble to catch up with your competitors.
Either way you could lose money. So it’s important to manage your inventory as efficiently as possible.
Understand the inventory types your business has
Inventory usually falls into one of three main categories:
These are the basic materials from which your final product is made. Depending on your field of work, they can take up a lot of space.
2.Work in progress (WIP)
These are goods that are in the process of being manufactured but are not yet complete. Examples include toys to be painted and ceramics that haven’t yet been fired.
These are products that are ready to be sold to your customers. They may be sent to distributors or you might sell them directly to your clients.
Each category has different storage requirements, but each one is dependent on the other. If you don’t have enough raw materials, you can’t make finished goods. And if demand for your finished goods drops, you could end up with too many raw materials.
Improve your forecasts
The first step to efficient inventory management is to understand the demand for your products. How does it vary over time? There may be seasonal fluctuations or other trends that can help you work out how demand will change.
Quality accounting software will generate reports into past sales. These can help you identify which products are popular at which times of year. Then you can adjust your stock accordingly.
Understanding the market which you operate in is the best way to fine-tune your predictions. Once you’ve done that, you’ll have taken a big step towards more efficient inventory management.
Please contact us if you like to know further.