Empower Your Business with Prospect Management Software for Inventory

How to create outlook signature

welcome back to the channel guys today we're going to talk about the dreaded eye word you're probably struggling right now but that eye words inventory and it's something that kills a lot of businesses because they don't know how to manage it and a lot of you probably aren't managing it so we're going to give you the six reasons that we think you need to keep an accurate inventory and why it's important to your business and all that coming up right now on successful contractor [Music] so like many businesses we just started accumulating stuff we didn't have a system in place to track it we just knew that we needed some of this stuff and we wanted to have it on hand and so we ordered extra and now we have all of this inventory here how much inventory do we have you ask i don't know i we have a guess but i don't know number one is good accurate financial reporting so what we're doing and what i've been having the guys in the shop here do the last week is count all of the stuff you'll see these yellow post-it notes in here that'll tell us how many are in here and we're gonna actually start tracking that in the computer system so this inventory that's sitting on your shelf is impacting your financial reports whether you know it or not i don't care if it's stuff that you brought back off a job if you think you're going to sell it to another customer later on then it probably needs to be inventoried some people will call it a bone yard i just have all this extra free stuff over here but it's not really free it's stuff that cost you money and if you think that you can resell it to another customer later on or use it on a different job it's something that you should probably track [Applause] crap i need 57 and i only have four and i gotta have this job done by friday how am i gonna get enough of these has that ever happened to you have you ever gone to the shelf and you're like we usually have plenty of that and then it's just not there well having enough of the right stuff and knowing how much of it you have at any given time that's reason number two nothing is more frustrating than needing to get a job out the door and not having the right inventory on hand to be able to do that tip number three why in the world did i order eight units of six and a half foot posts we haven't sold the last 12 units from two years ago that stuff really happens and if you don't want to have too much of the wrong inventory knowing how much you should probably reorder is something else your inventory system can tell you it can help you understand how much you've sold your past inventory levels and how much you've sold over the last two years so you know how much if any to order so you don't just say well i think we move a lot of that stuff let's order some and then come to find out it takes you four years to move it that's another reason to keep a good inventory system so you don't end up with a whole bunch of six and a half foot posts that you'll never get rid of actually we'll get rid of these this is one of our top movers but we do things a little bit different than everybody else because well we're different hey guess what we'll just take one of these boxes they're both white they both have red labels they both have some stuff on it we're just gonna we'll just pack one of these up take it to the job wait we don't pay attention to the fine print and one of them is a three inch nail and one's inch and three quarter and we don't pay any attention to that so tip number four is making sure that we're getting the right stuff pulled because when we barcode all this stuff we can know what we're doing if we put it in the proper system we'll know that what we're pulling is what was actually needed on the job so helping make sure we pull the right stuff for the job not just go over here and get close and call it all good that's why people use barcodes because it can eliminate a lot of errors when you're pulling parts we did pretty good on the johnson job man i thought we did a lot better on the johnson job because the guys went out there and killed it as far as their hours are concerned but on the material side we fell flat on our face we used way more material than i thought we should have and i think it came down to damage and maybe we just cut some things wrong so we ended up using a lot more material we planned on and that's tip number five so job costing is the fifth reason that i would keep an inventory so you can track exactly what goes to the job exactly what comes back from the job so that you know your true job cost because there can be a lot of shrinkage that happens on a job site where more material was used than you planned on using or damage happened and occurred and that can raise your cost to do the job and lead you to think you were more profitable on a project than you really were an inventory system will help you catch those errors so that you can reduce that shrinkage the tip number six may be obvious but what i see and what a lot of people see when they look around me is i see a lot of money there's a lot of money sitting on these shelves there's a lot of money sitting outside there's a lot of money sitting on the floor and we need to know how much money is because at the end of the year a lot of people get into a position where they're like wow i made a ton of money last year my accountant told me i made a lot of money but this is one of those places that your money can be tied up and you not even realize it because it can be tied up on the shelves so you can make a lot of money have no money in your bank account and it's all sitting right here so cash management is the sixth reason that i would make sure i have an inventory system so that i can make sure that i'm not carrying more inventory than i need for my operation and what that number is going to be needs to be a conversation between you and your accountant or maybe you and your banker whatever but having too much inventory is not a good thing because it's sitting there tying up your cash and could be hurting your cash flow and if you don't know how much that is then it's really hard to hit a target that you don't have so to be able to plan for how much cash we need and plan your cash flow you've got to know how much money sitting on your shelves and in your inventory so a lot of people are going to wonder what kind of stuff do we inventory well here we inventory just about everything as you can see behind us we're getting ready to outfit two trucks and all those tools that are on that truck are actually going to be part of our inventory however that's not part of our selling inventory but it's part of the inventory so that we know how much it costs for us to put a truck on the road and we know how much that truck how many tools and how much value is tied up on that truck but as far as inventory goes we'll inventory things like bandsaw blades if it's a item that we buy in bulk and we're planning on singing out on jobs then we'll inventory that marking paint for marking out layout on projects we inventory all that so that if they want some we have an order quantity we have fence signs in our inventory we have key chains and our inventory stickers basically if we order it in bulk and we use it up over a longer period of time it's showing up in our inventory somewhere in wyoming we inventory all of our fuel we have bulk fuel tanks and so we inventory our fuel and we know how much fuel we used up on each one of our projects so how carried away you get is going to be depending on your individual circumstances but here we try and inventory anything that we buy in any bulk and may use up on many many different projects so that's our guideline so next week you'll want to stay tuned because what we're going to talk about is we're going to talk about the hardware that you need potentially and how to choose a software because the software is the most important part of the inventory management system it can either make or break you depending on how you operate in your business if you have a lot of parts that you need to combine to make another part then that's something you need to look for in your inventory management system which we can do we can take five different parts make a gate out of it and it'll turn it into a different part take those five parts out of inventory and then add the gate into inventory some softwares can do that others can't these are the things that you need to be considering and we'll talk a lot more in detail about things to consider when looking at an inventory system next week on successful contractor we'll have all the tips you need to choose an inventory system and get that up and running in your business today i'm mark with successful contractor and i'm serious about inventory until next time you have a good dang day you