Effective inventory management is one of the biggest challenges that small and medium-sized enterprises (SMEs) face. Unlike large corporations with dedicated logistics teams and expansive warehouses, SMEs often work with limited storage space, unpredictable demand, and constrained budgets. Without a solid system in place, business owners may struggle with stockouts that lead to missed sales or excess inventory that ties up valuable capital. Human errors, poor record-keeping, and inadequate forecasting only add to the complexity and make inventory control a constant balancing act.
However, a proactive and strategic approach to inventory management promises multiple benefits for smaller businesses. Optimized stock levels prevent unnecessary losses, reduce waste, and improve cash flow. At the same time, they enhance customer satisfaction by ensuring that popular products are always available. These advantages make it well worth it for startups and SMEs to take active steps to optimize their inventory management practices and invest in helpful solutions early on.
At Maya Business, we understand the challenges entrepreneurs in the Philippines face when managing their stock. That’s why we provide enterprise-class solutions designed to support SMEs in smoothing out their operations and building a more resilient business model. In this article, we’ll walk you through some practical strategies that can help you take control of your inventory and make data-driven decisions for sustained growth.
Monitor Inventory Turnover Ratio
A slow-moving inventory can lock up valuable resources, while a fast turnover helps maintain cash flow and avoid excess stock. A high turnover ratio generally signals strong sales; a low ratio may indicate overstocking or weak demand. Poor turnover can also lead to product waste, especially for perishable goods or seasonal items that may lose value over time. Tracking turnover regularly can help your business optimize purchasing and prevent capital from being tied up in stagnant inventory.
To improve inventory turnover, start by analyzing sales data and identifying slow-moving products that may need discounts, promotions, or discontinuation. Set clear restocking strategies based on demand patterns to prevent overordering. Consider also bundling slower-selling products with bestsellers to help move inventory efficiently. A modern point-of-sale (POS) system can be especially helpful in tracking turnover, as it provides real-time sales data.
Maya Terminal is a lightweight but powerful in-store card terminal machine that your business can readily leverage to stay on top of monitoring your sales. For one, it takes the functions of your average credit card machine to the next level by accepting all forms of digital payment currently available in the country, from debit and credit cards to e-wallet and QR Ph payments. This means you can use the terminal to process transactions with just about any other payment method besides cash, and you can view and manage every purchase in Maya Business Manager for easy record-keeping. Additionally, when integrated with an inventory management system, Maya Terminal can automatically update stock levels as sales are made. This seamless connection helps businesses track inventory in real time, reducing the risk of overstocking or running out of in-demand products.
Use ABC Analysis to Set Priorities
Not all products are equally profitable. Some generate high revenue with low stock levels, while others sell in large volumes but bring in lower margins. Because of this, managing all inventory the same way can be inefficient and costly. ABC analysis allows you to categorize stock into three groups: high-value, moderate-value, and low-value items. This method can help you prioritize inventory control efforts, so that the most critical products receive appropriate attention.
You can apply ABC analysis by classifying products into three tiers based on revenue contribution and sales frequency. High-value items require stricter monitoring and frequent stock reviews, while lower-value items can be managed with bulk ordering or automated restocking. This approach helps you allocate resources efficiently and ensures that the most impactful products are always available.
Utilize Demand Forecasting
Unexpected stock shortages or surplus inventory can disrupt business operations and impact profitability. Without accurate demand forecasting, you risk overordering slow-moving items or running out of popular products. Analyze historical sales trends, seasonal demand fluctuations, and market conditions to better anticipate customer needs and make more informed stocking decisions.
Start by reviewing past sales data to identify patterns in purchasing behavior. Factor in external influences such as holidays, economic conditions, and industry trends to refine predictions. Inventory management software can also help automate this process by analyzing data in real time. Regularly updating forecasts based on new insights allows you to stay agile and adjust inventory strategies as needed.
Establish Strong Relationships with Suppliers
Reliable suppliers play a crucial role in maintaining a smooth inventory flow. Late deliveries, inconsistent stock availability, or sudden price increases can disrupt operations and lead to financial losses. If you have strong supplier relationships behind you, you’ll enjoy better pricing and faster restocking—both of which will afford you greater flexibility during peak demand periods.
Your suppliers will surely appreciate it if you maintain clear and consistent communication about inventory needs and expectations. Negotiate favorable terms, such as flexible payment options or priority restocking, if you find you need to improve your cash flow. It’s also wise to diversify suppliers to avoid becoming dependent on a single source.
Standardize Your Reordering Processes
Inconsistent ordering can lead to inventory mismanagement, which in turn may result in stock shortages or excess inventory that strains cash flow. Without a clear reordering system, your business may struggle to maintain optimal stock levels and end up making inefficient purchasing decisions. On the flip side, if you standardize the reordering process, you can guarantee that stock replenishment happens at just the right time.
The best way to streamline reordering is to set predefined reorder points based on sales patterns and safety stock levels. Automate purchase orders through an inventory management system for less human error and more timely restocking. It’s also always a good idea to review reorder points and adjust them based on changing demand trends, as doing so helps maintain efficient stock control.
Optimize Your Operations with Maya Business’s Enterprise-Grade Solutions
It’s entirely possible for your business venture to operate as efficiently and productively as any major corporation. Sign up for Maya Business for access to our full suite of payment, disbursement, and business banking solutions, all of which we’ve expressly designed to bring cutting-edge innovation and stellar performance within reach of smaller businesses.
Once you have your Maya Business account, you can open a Maya Business Deposit account and use it as your settlement account. With an industry-leading 2.5% per annum interest rate, you’ll earn PHP 25,000 in interest per year on a PHP 1 million deposit. You’ll also get to send money to your partners and suppliers for free via InstaPay and PESONet, which will help you save more.
Signing up also qualifies you for a no-collateral Maya Flexi Loan offer of up to PHP 2 million in just 3 months—that’s another helpful funding source that you can use to seize any fruitful growth opportunities that might come your way. Just use Maya as your primary processor for all wallet and card payments. The more you use our solutions, the better the loan offer will be.
Apply for your Maya Business today and enjoy all these benefits and many more.
