Just last week I spent an hour at the corporate offices of Fishbowl Inventory, a software firm that specializes in helping small and medium-sized businesses better control, manage, and optimize the ever-elusive asset of inventory. I call inventory an asset because any inventory sitting in any business needs to be considered as cash, and, more specifically, precious working capital. I am going to write about inventory and share some of the things I learned during my visit, hoping it will help you.
WHY SO MUCH FUSS OVER INVENTORY
Inventory has three major impacts on cash flow. First, you have to use cash to buy inventory, which you don’t get back until you get paid for selling the inventory. Second, the difference between what you paid for the inventory and what you sell it for is gross profit, another boon to cash flow. Third, the more times you can “turn” your inventory over in a year means more gross profit generated using the same cash invested in inventory. Missing one inventory turn per year is often the difference between a profit and a loss for an entire year!
THE SOFTWARE GAP
Software like QuickBooks and other low-cost, off-the-shelf and software-as-a-service (SaaS) accounting packages are generally terrible at handling, managing, and accelerating inventory. Relying on those systems is neglecting your vital working capital, a sure-fire formula for failing in business. On the other end of the accounting/ERP software spectrum are big, expensive, complex systems. These solutions require significant training, which may end up costing more than the system itself, and a robust accounting staff to correctly set-up and manage the day-to-day transactions in the system.
HOW FISHBOWL FILLS THE GAP
Fishbowl Inventory has several products to address the gap between these two ends of the spectrum. They integrate with QuickBooks, replacing its weak inventory system with a very affordable product that will solve all of your inventory issues and empower you to track, manage, and optimize this critical use of your working capital. Rather than list all of the features, you can check them out here: Fishbowl Inventory 2012. Fishbowl also has a product that competes very nicely with the large Enterprise Resource Planning (ERP) systems, yet costs a lot less--Fishbowl Enterprise. It’s modeled after the QuickBooks integrated version, with all of the great features and easy-to-use functionality, but it’s got so much more in terms of the running your entire business. Depending on the size and inventory complexity of your business, one of these two systems will likely address most small and medium-sized business needs.
Tying up your cash in inventory is a strategic business decision. You will only squeeze the maximum return from that investment in inventory when you control, manage, and optimize your inventory according to best practices. Although there are many inventory and accounting systems on the market, Fishbowl seems more capable than most to get you exactly what you need at just the right price.
[Author’s Note: I did not nor will I receive any form of compensation for writing this post. The product is good enough to merit my positive feedback, and it can make a big enough difference for businesses with inventory that I feel it is worth sharing.]