What are inventory controls : The Ultimate Guide

Surya SK
December 14, 2021

Now, keeping track of inventory can be a tiresome aspect, especially if you're an omnichannel retailer or an eCommerce house. However, specific systems and tech are available to help companies facilitate their supply chain management. Now with the help of inventory controls, you can efficiently manage and monitor your stock.

This article will give a deeper insight into what inventory control is, its specifics, and its challenges. You'll further get inventory control techniques and tips. 

Table of contents

What is inventory control?

Inventory control also referred to as stock control, is a course of action taken to manage an organization's stocks. It can be in their warehouse or be stocked in different areas. Inventory control responsibilities comprise product management from the time you have them available in reserve until it reaches your customers or even disposal. An inventory control system helps business owners to monitor their stock's shipments, disagreements, and still storage.

Inventory control's sole aspect is to manage your inventory levels to make sure that you are keeping an adequate amount of stock for each of your products. 

Are inventory control and inventory management the same?

While they both might sound the same, the aspects of inventory management are pretty different from inventory control in specific ways of their own—inventory control functions with the inventory present in a distributor's storehouse. Inventory control requires the knowledge of knowing what products are currently in your stock and where the products are stationed within your storehouse. Inventory control makes sure that the inventory is taken care of in perfect condition and is managed in a way that helps to cuts down on costs.

Meanwhile, Inventory management is associated with the business pipeline of product renewal and forecasting. Inventory management mainly revolves around domains like when to reorder your products and how many units to order, to avoid falling short or holding too much in stock. Inventory management also makes sure that the right products are placed in the right place and time. Keep in mind that you can achieve better inventory management when you improve your inventory controls. 

How can inventory control add value to your business?

The value of inventory can affect various factors, from cost reduction to utmost customer satisfaction. Your company can scale vastly in sales, but without taking care of your inventory, the profitability of your business takes a dip. Here are some ways inventory control can add value for your business:

1. Quality control

Making use of an inventory management system allows you better quality control. If you have the ability to take care of all features of your stock, you gain better control quality over your inventory. The longer you keep your products in-store without moving, the more likely it is to be impaired. You can avoid that damage by making sure that your stock stays in rotation with the help of your warehouse storage. Inventory control also allows you to check the quality of stock you get from suppliers.

2. Administrative control

Inventory control allows you to have administrative control over your business. A well-organized Inventory control gives you control over your stock and helps you to get the most out of your investment in your supplies. This aspect of inventory control is critical for locating your supply and the ease of accessing it. Inventory control with respect to the organization of your stock in hand is essential for the proper functioning of your business. Inventory control will ensure you have adequate units to meet orders and have additional stock in hand. Efficient inventory control will also help you to eliminate possessing dead stock or overstocking your products. Safety stock acts as a decoy to avoid the risk of your product being out of stock. Deadstock is an inventory that stays shelved. 

3. Accounting accuracy

Keeping track of your inventory records accurately is essential for taking care of your capital and your auditing. Being aware of assets you hold gives you the awareness to determine your total spoilage and estimate the overall value of your business. Financial accounting regulations and tax mandates will require your company to possess a physical inventory account apart from your accounting software. All stocks in your inventory system should hold accurate numbers and price points. This will make sure that your company can pass through audits without affecting your business in any way. 

The challenges you can face with inventory control

Although Inventory control has its fair share of benefits, it poses specific difficulties like anything else. Below are a few potential challenges you may face:

1. Allocating the time and resources

Manual inventory management calls for adequate resources. Manual inventory control requires human resources and capital. Leaving inventory control unprioritized can cause you to lose financially in the long run. Schedule a routine to make some time for inventory management. Add inventory control to your overall budget.

2. Visibility

Companies with large quantities of stock, complicated warehousing, or businesses selling through various channels can possess issues and challenges related to visibility. Having an overall outlook of your business's inventory for accounting, sales, cash flow can be beneficial to you. Being unaware of the status of your inventory can cause issues with your inventory which can lead to deadstock and affect the quality of your inventory. The data you acquire through inventory control can help you to boost visibility.

3. Human error-prone

Let's face it, human errors are pretty much inevitable when businesses have perpetual movement of stock to and fro from your warehouses. For instance, when vendors send invoices, they have to be accurate as they have to match the purchase orders and the inventory present. Any differences in the invoices can affect your inventory control management. However, you can eliminate human error by integrating your solutions.

Types of Inventory control system

There are various inventory control systems and techniques that businesses can make use of. Each system has its advantages and disadvantages, given your size of inventory and business operations. Here are a few types your business can make use of:

1. Spreadsheet to manage inventory

Smaller-sized businesses, businesses with similar stock, or businesses that don't keep track of stock can make use of a spreadsheet in a manual manner to manage inventory. Maintaining a spreadsheet might seem like a less expensive option than other types of inventory control systems, but processing inventory control with a spreadsheet can be harder to keep on a continuous basis. However, on the other side, your team wouldn't have to go through a process of adapting to an automated inventory system. While some may feel that spreadsheets give you a feeling that you have better control over inventory control, manual inventory control is more prone to human error. 

2. Periodic inventory system

A periodic inventory system depends on physical inventory units. Data regarding inventory is updated on a regular basis when a physical count is subjugated. Now, this can be tiresome and take all day for businesses making constant inventory moves and for companies with large amounts of inventory. However, a periodic inventory system can work for companies that don't work with multiple orders. In cases where minimal charges are present to work with, it is easy to work with minimal data. Keep in mind that your stock levels will be up to date rarely, Which ultimately leads to delays. Again, a periodic inventory system depends on inventory audits over an automated system that updates simultaneously. 

3. Perpetual inventory system

Perpetual inventory systems keep tracking and updating your stock simultaneously when a transaction occurs or new stock is received through your eCommerce solution. It is said that around 72% of all retailers aim to increase real-time visibility in their supply chain with the help of automation, sensors, and analytics. Perpetual systems aim to enhance the visibility of your inventory as compared to periodic systems. Perpetual system also cuts down on the cost and overall time consumed due to physical inventory counts.

Additional tips for dealing with inventory system

As we begin to comprehend what inventory control is and the types of inventory control systems, we can make use of it. Here are a few tips you can put to use when it comes to inventory control.

1. Real-time inventory tracking

We can't underplay the value of automation. Real-time monitoring gives you access to accurate, detailed, timely data, which can help you to maneuver through your financial and business choices. Keeping track of your inventory can even boost your Return on investment and decrease your carrying expenses. If you're selling through multiple channels, then automatic inventory tracking can be even more helpful and assist you in various ways. 

Real-time inventory tracking


2. Consistent with the labeling system

Modern-day storehouse management gives companies exposure to a broader range of choices when it comes to classifying and finding inventory. Make sure you set up a system that works the best for your business and try being consistent with your labeling tactics.

Take, for instance, Stock keeping units are an easy way of taking care of your inventory. However, if multichannel inventory management is what you deal with, then barcoding your inventory is the way to go. 

3. Analysis

If you're going with the perpetual inventory system, then the ABC analysis is something you might want to consider. The ABC analysis labels items in the inventory based upon the total consumption rate of the product. The letters "ABC" stand for the different categories items can be categorized.

'A' items refer to products with a maximum consumption rate. This will be categorized as a lesser number of things with a higher rate of consumption.

'B' items have a lesser consumption rate than A but are higher than 'C.' 

'C' items are categorized as the category with the lowest consumption value. So while the risk factor related to this stock is less, you can't really expect much returns from it too. 

4. Set reorder points

Reordering is one part of inventory control that is a bit complicated. Giving your customers direct access to stock without having to go through carrying costs of dead stock is reasonably necessary. With the help of inventory control software, you can get alerts when a particular product gets below a certain level of supply. You can set these individual products to certain reorder levels without the help of the ABC analysis tactic.

5. Perform regular audits of inventory

Having inventory control software is excellent, but keeping an eye for theft, spoilage, potential human errors, etc., is a must. Making sure that each domain of your business is in sync with respect to your inventory is necessary. Also, keep track and make sure that your systems are communicating on point with your accounting division about the cost and count of your stock. 


Having efficient inventory control running is essential for a successful business; this goes true for a new brand trying to establish itself and an already established brand in its prime. Try out different automated inventory control software systems for free, and this gives you an ideal strategy for inventory control to keep track of your assets on a regular basis. This helps you in creating more visibility and gives you better control over your inventory. 

So, try out different inventory systems for your business and see how they pan out for you. You'll never know what works better for you without experimenting. Good luck!