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6 Reasons Excel Doesn’t Work For Stockroom Management

rsz_istock_000050498366_large Managing your stockroom efficiently is crucial to the long term success of your company, and companies in the UK can use all the help they can get. By one estimate, as many as 50% of UK businesses fail in the first 2 years. If you are using Excel to keep track of your stock you are asking for problems. Excel can’t provide the functionality and accuracy that barcode based stockroom solutions provide. While Excel is a great program for many things, it simply isn’t designed for inventory or stockroom management. [Tweet "50% of UK businesses fail in the first 2 years."] Many small business owners start off using Excel or even worse a pen and paper system to manage their stockroom because they already own and are comfortable with Excel and it can perform the most basic functions of stockroom management. However, manual systems can’t really capture your inventory movements along the supply chain in detail. Excel and other manual systems just provide a very basic account of how and when items moved into your stockroom and then out of it. The simple approaches cannot tell the whole story of how your company handles and moves inventory and what resources it uses along the way.


Today, there are a number of sophisticated stockroom control systems that can help you get a complete picture of your inventory and stockroom and are affordable. Using barcode technology and databases designed for analyzing stock flows from manufacturer to consumer, companies can get a strong ROI and some experts believe companies can improve their profitability by 20-50% if they improve their stockroom management. Here are 6 reasons why you should ditch Excel for a more advanced stockroom control system:

1. Time consuming and error prone

When using Excel or any system where employees need to enter data manually, mistakes will be made. Entering inventory data manually leads to errors. Paul Huffaker, Vice-President of Racesource, explains, “Maintaining an accurate inventory count in Excel was time consuming and error ridden. Often I would reorder or manufacture parts I already had simply because I didn’t know I had them, which was an unnecessary cost.” Beyond mistakes, entering data, especially stockroom data by hand is time consuming. Using barcode scanner, data is entered instantly and accurately.

2. Quickly becomes too big and unwieldy

Excel spreadsheets used to track hundreds or thousands of items can quickly become unmanageable, and more importantly, unsearchable. The whole reason behind tracking your stock is so that you can find it when you need it. If you can’t search the database your information is in, how do you expect to be able to accurately locate your actual inventory items?

3. Doesn’t provide real time data and can’t be used for effective forecasting

Excel can’t track stock flows in real-time, so you never know exactly where something is at any given moment, you just know where it was last. As Sid Helms, Director of IT at Diversified Distribution told Entrepreneur.com, you can never be sure if something has changed between when it was entered and when you check your spreadsheet. More importantly, stockroom tracking is ultimately about making sure your stockroom isn’t empty and you always have adequate stock for your customers. Excel doesn’t provide the kind of tracking tools and information you need to make effective forecasts about the future. It can’t identify seasonal trends or sales history and you never really know what you have. rsz_istock_000066830275_large

4. Can’t produce needed audit reports or track important accounting financial information

When you are using manual tracking processes it is hard to take the information you are collecting and turn it into a useful report for auditors, accountants, or your own records. Excel is notoriously bad at producing reports and often the information in it needs to be double checked when it comes time for an audit or tax preparation. This means Excel is wasting time on two fronts. First, you have to review inventory whenever it comes time for a report because you don’t know if the Excel sheet is current. This review process can take days or weeks and many employees depending on your stockroom inventory. Second, you need to translate your Excel data into the needed report format. Using barcode based systems to manage your stockroom can eliminate both these issues. First, data is kept in real-time so you always know your information is accurate and up-to-date. Second, most stockroom management solutions come with programs that help convert collected data into various report formats easily. Because these systems are designed for stockroom management they offer solutions tailored to your needs.

5. Can’t help optimize stockroom layout

At best, Excel is tracking when an item enters your stockroom and when it leaves, and where it is supposed to be in the meantime. Tracking more information more frequently would take unnecessary time and cause extra trouble. This is a big disservice though, because you can’t get a complete picture of how items use resources during their journey through the stockroom. This means you can’t get into higher level stockroom optimization, like layout efficiency. When you start using sophisticated and technologically advanced stockroom tracking systems, you have a wealth of data to use in optimizing your stockroom layout. Using barcode tags you can get a complete picture of how your inventory moves through the stockroom and you can setup your layout to take advantage of it.

6. Limited user access and increased risk of fraud

Excel workbooks are only accessible to one user at a time. It also doesn’t log users and track their changes. This means it is very hard to monitor users and to keep track of data. Fraud is often the product of opportunity, and if just one person has access to your spreadsheet, they have a big opportunity to commit fraud. That is one of the biggest factors contributing to a fraud being perpetrated. By using a stockroom control database designed for inventory management, multiple users will be able to access the database at a time. This means more than one employee can manage and check the information in the database. Combines with the speed and accuracy of barcode based tracking, this means that a single user will not have the chance to commit fraud. , As you can see, Excel simply isn’t up to the task of stockroom management. There is no reason to wait for your company to reach the point where Excel is causing problems. Investing in stockroom control software will help you company operate better, keep customers returning, and help you appeal more to investors. How could implementing a dedicated stock control system save your employees time every day?