What is inventory reporting?
Inventory reporting is an organized summary of a company’s available stock. Reports are made to document all in-house resources in detail, what products can be created using those resources, when materials need to be reordered, and how the overall inventory process is performing.
Inventory reporting gives companies a good look at what may or may not be working in their inventory management systems. It helps identify risks of a potential shortage or surplus, categorize items to streamline reorders, and open up space being taken up by unnecessary materials. With carrying costs taking up 20-30% of total inventory costs, optimizing what resources are being held in stock is essential.
Inventory documentation can be made as physical reports or digitally using automation tools. Managing inventory virtually allows companies to access up-to-date stock data anytime and anywhere. Inventory control software can be used to keep a record of inventory reports, forecast upcoming inventory needs, track assets, optimize orders, and more.
Types of inventory reports
There are multiple types of inventory analysis reports that are all useful depending on a company’s unique needs for its inventory. These reports can be used individually or in conjunction with documents and fulfill any predetermined inventory goals or KPIs.
- A multi-stock location report helps companies list stock throughout multiple inventory locations. This type of report is very valuable when figuring out how to consolidate inventory between warehouses, when to reorder necessary supplies, and where to send them.
- An on-hand report includes stock in different locations and all items moving through the production and distribution process. This includes resources that were just received at a company warehouse, materials waiting to be organized in inventory, items ready to be sold, and products still in the process of being delivered to the end-user.
- A purchase order report gathers all the information on pending items that have been purchased and are on their way to an inventory stock location.
- A reorder report shows all the current counts of inventory items, any pending purchases or sales, and when things need to be reordered. Usually, reorder inventory reports vary by location as each stock location may require materials to be replenished at different rates.
- A change report shows all the changes and movements within stock and inventory and explains why those changes may have occurred. Dates are especially important in this report as they can be beneficial in identifying change patterns in a given time frame.
- A picking report lists what inventory items need to be gathered to fulfill a specific need, whether it’s creating a product, completing a customer order, or passing inventory to production.
- A packing report lists what products or materials should be included in the final package to the customer as it is being packed to ship in the distribution stage.
Benefits of inventory reporting
The seven types of inventory reports create many opportunities for monitoring, documenting, and improving inventory processes. Inventory reporting also plays a role in organizing not only stock but all facets of a company that is creating a product and distributing it. The following points outline the different ways a company can benefit from inventory reporting:
- Replenish stock efficiently. Every type of inventory report is made with one main purpose: making sure that everything is where it is when it needs to be. Effectively reporting inventory helps streamline how inventory materials are used and reordered. Replenishing items is much easier when there is more insight into exact stock numbers and inventory needs.
- Identify inventory issues. The more time spent on something, the higher the chance of recognizing ways to improve the process. Inventory reporting can help a company see potential inventory errors before they occur. Addressing these issues quickly can save companies money in carrying and handling costs.
- Create transparency. When information is accurate and readily available, there is less space for potential miscommunications. Creating transparency within an organization is invaluable in the production and distribution process. Inventory reporting helps all individuals involved remain on the same page and creates an environment where everyone knows what is happening and when.
- Optimize inventory costs. After using inventory reporting to identify potential issues, companies can use this newfound knowledge to make changes that can save them a lot of time and money. Seeing inventory more clearly can also help companies allocate budgets more effectively while avoiding the chances of experiencing inventory shortages or surpluses.
- Improve customer service. Customers appreciate when their item is delivered to them efficiently. While inventory reporting refines the inventory process, all production and distribution steps get positively affected as well. When things are organized and well taken care of, you are left with a smooth process with little to no hiccups. A high-quality product delivered effortlessly and quickly creates customer satisfaction and brings end-users back for more.
- Forecast upcoming demand. Once inventory reports stack up, companies can use that historical inventory data to forecast upcoming stock needs using demand planning. Detailed information from the past shows patterns in inventory needs and demand highs or lows.
How to write an inventory report
With all the types of reports and benefits in mind, companies can now dive into the process of writing an inventory management report. How an inventory report is written can vary depending on what works for individual organizations. The general guide to writing an inventory report consists of six main steps.
- List all major inventory items. Write down every item that will be included in the inventory summary and leave space for descriptors. Depending on the type of report, this can be on-hand, purchase order, or packing materials. Some companies may choose to include stock items across all locations or create unique reports for each.
- Categorize and prioritize. Take all the listed items and arrange them in an order that is most convenient to meet inventory needs and replenish stock. Organization methods can include grouping items by what product they create, date of reordering, order of use in production, or even alphabetically.
- Price items. If possible, include the prices and costs associated with all inventory items. Having these accounted for on an inventory report can help identify budgetary improvements.
- List unit amounts. Note the most updated counts of each inventory item. Ensuring the utmost accuracy at this step is crucial.
- Fill out detailed descriptions. These descriptions should include colors, uses, sizes, reorder dates, expiration dates if applicable, and any information that can be useful in the organization and identification of the material as it moves through inventory.
- Choose a report basis. Once the reports are completed, ensure that a system is in place for how often reports will be conducted and updated. Depending on the choice of an inventory management method, companies may choose to take inventory daily, weekly, or monthly. Some companies may even decide to take stock after a certain amount of units have been produced. Updating report information can be done faster and more effectively using inventory automation.
Alexandra Vazquez
Alexandra Vazquez is a Senior Content Marketing Specialist at G2. She received her Business Administration degree from Florida International University and is a published playwright. Alexandra's expertise lies in writing for the Supply Chain and Commerce personas, with articles focusing on topics such as demand planning, inventory management, consumer behavior, and business forecasting. In her spare time, she enjoys collecting board games, playing karaoke, and watching trashy reality TV.
