Choosing an inventory management system is one of the most important decisions a business can make. A good system can transform how you manage inventory, reduce errors, save time and money, and give you the oversight you need to make informed decisions. But with so many options on the market, it can be difficult to know where to start.
This guide takes you through everything you need to know to choose the best inventory management system for your business. We cover key features, costs, implementation, and what separates good solutions from bad ones.
Why do businesses need an inventory management system?
Regardless of what kind of business you run, good inventory management is essential for keeping track of your goods. Without a good system, it can quickly become overwhelming to keep track of what's in stock, how much you have of each item, and when it's time to reorder.
The challenges of manual inventory management
Many businesses start with simple solutions like Excel spreadsheets or paper-based systems. This can work in the beginning, but as the business grows, challenges arise:
- Registration errors: Manual registration is error-prone and can lead to inventory discrepancies
- Time-consuming counting: Regular stocktaking takes a long time and may require normal operations to stop
- Lack of real-time data: You don't know exactly what's in stock until you've counted
- Difficult traceability: It's hard to track where items are and when they were registered
- Accounting integration: Manual transfer of data to accounting is time-consuming and error-prone
The benefits of a digital inventory management system
A good inventory management system solves these challenges and gives you:
- Real-time overview: See exactly what's in stock at any time
- Reduced errors: Automatic registration eliminates human errors
- Time savings: Automated processes save hours every week
- Better decisions: Make informed decisions based on actual data
- Integration: Easy transfer of data to accounting software
- Traceability: Full history of all inventory movements
Key features to look for
When evaluating inventory management systems, it's important to look for features that match your specific needs. Here are the most important features businesses should consider:
1. Barcode scanning
Barcode scanning is one of the most important features in a modern inventory management system. Instead of manually entering item numbers, you can scan barcodes with a mobile app or scanner.
Why it matters:
- Reduces errors by up to 99%
- Saves time – scanning takes seconds instead of minutes
- Makes it easy to register items when they arrive
- Enables quick stocktaking
What to look for:
- Mobile app with built-in barcode scanner
- Support for various barcode types (EAN, UPC, QR code)
- Works on both iOS and Android
- No extra equipment needed (uses the phone's camera)
2. Real-time overview
A good inventory management system always gives you an up-to-date overview of your inventory. When an item is scanned or registered, the stock is updated immediately.
Why it matters:
- Make decisions based on actual numbers, not estimates
- Avoid promising delivery of items that aren't available
- Quickly identify which items need to be reordered
- Optimise inventory levels
What to look for:
- Real-time inventory updates
- Overview of all items in one place
- Filtering and search functions
- History of inventory movements
3. Order management
For many businesses, it's important to be able to link items to specific orders or projects. This makes it easy to follow up on which items are to be used in which orders.
Why it matters:
- Keep track of which items are linked to which orders
- Plan work based on available items
- Track costs per order or project
- Avoid using items reserved for other orders
What to look for:
- Easy order creation
- Link items to orders by scanning
- Overview of all orders
- Ability to add project ID or order number
4. Cost registration and inventory valuation
To have full control over inventory value, you need to be able to register costs on items. This makes it possible to calculate the total value of your inventory.
Why it matters:
- Calculate accurate inventory value for accounting
- Track purchase costs
- Analyse profitability per item or order
- Prepare data for bookkeeping
What to look for:
- Easy cost registration per item
- Automatic calculation of total inventory value
- Cost history
- Data export to accounting software
5. Accounting integration
One of the biggest challenges with manual inventory management is transferring data to accounting. A good system should make this easy.
Why it matters:
- Save time on accounting work
- Reduce errors from manual transfers
- Keep accounts up to date
- Meet accounting requirements
What to look for:
- PDF export that can be imported into accounting software
- Support for various accounting formats
- Automatic report generation
- Regular data exports
6. Mobile app
For many businesses, it's important to be able to register items directly in the warehouse or at the location where they're used. A mobile app makes this possible.
Why it matters:
- Register items when they arrive, not later
- Scan items directly in the warehouse
- No need to go back to the office
- Multiple users can work simultaneously
What to look for:
- Works on both iOS and Android
- Works offline (syncs when connected)
- Simple and intuitive user experience
- Same functionality as the web interface
7. Web interface for administration
In addition to the mobile app, the system should have a web interface for administration and overview.
Why it matters:
- Get a broader overview of the entire inventory
- Manage users and access rights
- Generate reports and export data
- Configure system settings
What to look for:
- Simple and intuitive interface
- Works on all devices (PC, tablet, mobile)
- Fast and responsive
- Good overview and data visualisation
Special needs to consider
Regardless of what kind of business you run, there may be some special needs that not all inventory management systems cover. Here are some important points to consider:
Traceability and history
For many businesses, it's important to be able to trace where items come from and when they were registered. This can be important for quality control, recalls, or for following up with suppliers.
What to look for:
- Full history of all inventory movements
- Track when items were registered
- See which users made changes
- Export history data
Multiple warehouse locations
Many businesses have items in several places – in the main warehouse, in shops, in interim storage, or with subcontractors.
What to look for:
- Support for multiple warehouse locations
- Easy transfers between locations
- Overview of stock per location
- Track items between locations
Integration with other systems
Some businesses need to integrate the inventory management system with other business systems such as ERP, accounting, or sales systems.
What to look for:
- API for integration with other systems
- Data export/import
- Support for various data formats
- Documentation for developers
Costs and value assessment
When evaluating inventory management systems, it's important to look at more than just monthly costs. You should assess the total value over time.
Monthly costs
Most modern inventory management systems are SaaS solutions (Software as a Service) with monthly subscription costs. These vary based on:
- Number of users
- Number of items
- Functionality
- Storage space
What to look for:
- Transparent pricing with no hidden costs
- Scalable pricing that grows with the business
- No setup fees or lock-in periods
- Ability to upgrade or downgrade
Implementation costs
Some systems require significant setup and configuration, while others are ready to use with minimal setup.
What to look for:
- Minimal setup time
- No need for extra equipment
- Easy migration from existing systems
- Good documentation and support
ROI calculation
To assess whether a system is worth the investment, you should calculate the return on investment (ROI). Consider:
- Time savings: How many hours do you save per week?
- Reduced errors: How much do inventory errors cost you per year?
- Better decisions: How much can you save with optimised inventory levels?
- Integration: How much time do you save on accounting work?
Step-by-step guide to choosing a system
When choosing an inventory management system, you should follow a structured process:
Step 1: Identify your needs
Before you start looking at systems, you need to identify what you actually need:
- How many items do you manage?
- How many users need access?
- Which features are absolutely necessary?
- Which features are "nice to have"?
- What is your budget?
Step 2: Research and comparison
Once you know what you need, you can start looking at different systems:
- Read reviews from other businesses
- Look at feature lists
- Check pricing
- Request demos or trial versions
Step 3: Test the systems
Most systems offer free trials. Take advantage of this:
- Test all important features
- See if the system is intuitive to use
- Test the mobile app
- Check speed and performance
Step 4: Evaluate support and documentation
A system is only as good as the support behind it:
- Check support availability
- Read the documentation
- See if there are videos or guides
- Assess the quality of customer service
Step 5: Make a decision
Once you've tested the systems, it's time to make a decision:
- Weigh all factors together
- Consider not just cost, but also value
- Think long-term – will the system grow with you?
- Make an informed decision based on your needs
Common mistakes to avoid
When choosing an inventory management system, there are some common mistakes you should avoid:
Mistake 1: Choosing the cheapest option
The cheapest system isn't always the best. Assess total value, not just monthly costs.
Mistake 2: Ignoring usability
A system that's difficult to use won't be used. Make sure the system is intuitive.
Mistake 3: Not testing the mobile app
If you need a mobile app, test it thoroughly. Not all mobile apps are equally good.
Mistake 4: Ignoring scalability
Choose a system that can grow with your business. You don't want to have to switch systems every year.
Mistake 5: Not considering integrations
Think about the future. Will you need to integrate with other systems? Check whether the system supports this.
Why Momentech is right for your business
Momentech is designed to be simple and effective for all types of businesses, covering all the key features you need:
Barcode scanning with mobile app
Momentech's mobile app lets you scan barcodes directly from your phone. You don't need any extra equipment – just your phone. The app works on both iOS and Android and is easy to use.
Real-time overview
With Momentech, you always have an up-to-date overview of your inventory. When you scan an item, the stock is updated immediately, both in the app and on the web interface.
Simple order management
Link items to orders with a single click. When you scan an item, you can immediately choose whether to add it to an existing order or a new order.
Cost registration and inventory valuation
Register costs on items and get automatic calculation of total inventory value. This makes it easy to prepare data for accounting.
PDF export for accounting
Export inventory data directly to PDF format that can be imported into accounting software. This saves you a lot of time on accounting work.
Easy implementation
Momentech is designed to be easy to get started with. You don't need any setup or configuration – just download the app and start scanning.
Scalable solution
Momentech grows with your business. Add more users, items, and orders as needed, without having to switch systems.
Conclusion
Choosing an inventory management system is an important decision that can have a major impact on the efficiency and profitability of your business. By following this guide and considering all the factors, you can make an informed decision that delivers value over the long term.
Remember that the best system for you is the one that matches your specific needs. Don't be tempted by fancy features you don't need, and don't compromise on features that are important to you.
If you want to learn more about how Momentech can help your business with inventory management, you can read more about simple inventory management with Momentech or getting started with the app.
Are you ready to improve inventory management in your business? Get in touch with us and we'll help you find the best solution for your needs.