Manufacturing & ERP

How to Improve Inventory Accuracy Before You Buy New Software

Ascent24 Technologies
5 min read
Illustration of warehouse shelves with a handheld scanner checking boxes against a stock dashboard

Short answer: Start by measuring how often your system count matches the shelf. Then fix the handful of habits that cause most gaps: unrecorded receipts, picks taken without scanning, unlogged returns and damage, and items stored in more than one place. Run small daily cycle counts instead of one big annual stocktake. Buy new software when the process is sound but your tools cannot keep up, for example with several warehouses, barcode scanning or automatic reorder points.

Why stock numbers drift

Most businesses believe their stock figures until a customer order proves them wrong. A March 2026 survey of 400 inventory, warehouse and operations professionals by inventory-software maker inFlow, run with research firm OvationMR, shows the pattern clearly. 92% said they were satisfied with how they manage inventory, yet 49.5% named inventory accuracy as the area that most needs improvement, and 44% ran out of stock at least once a month (press release, 28 July 2026). About 74% used spreadsheets as their only or main inventory tool. The figures are self-reported, so treat them as a direction, not a benchmark for your business.

The causes are rarely mysterious. Stock arrives and is put away before anyone records it. Someone takes two cartons for an urgent order and plans to update the sheet later. Returns sit in a corner, neither saleable nor written off. The same item lives on two shelves, so a count finds one and misses the other.

Step 1: Measure inventory record accuracy

Pick 50 to 100 items across fast, slow and high-value stock. Count each one physically and compare it with your system or spreadsheet.

Inventory record accuracy = items where the count matches the record ÷ items counted × 100

Decide your tolerance first. For expensive or serialised items, only an exact match counts. For low-cost consumables, a small allowance may be reasonable. Write the result down. It is your baseline, and the number you will track every month.

Step 2: Fix the process gaps

  • Receiving: nothing goes on a shelf until it is booked in against the purchase order.
  • One home per item: give every SKU a fixed location code. If overflow stock is unavoidable, record the second location.
  • Issues and picks: every movement out of the store gets recorded at the time, not at the end of the day.
  • Returns, damage and samples: give them their own status so they stop inflating saleable stock.
  • Units of measure: agree whether you count in pieces, packs or cartons, and set conversions once.

Step 3: Replace the annual stocktake with cycle counts

Cycle counting means counting a small set of items every day or week, so the whole range is checked over time. A simple approach is ABC classification: count your few high-value or fast-moving "A" items often, perhaps weekly, "B" items monthly and slow "C" items quarterly. When a count is wrong, find out why before you adjust the number. The reason is more useful than the correction.

Step 4: Add barcodes where errors repeat

If most mistakes happen at picking or receiving, barcode or QR labels on locations and products help more than extra checking. Barcode scanning was already the most common technology in the inFlow survey, used by 81.2% of respondents, so it is a mature step rather than a big experiment. Scanning works best once item codes and locations are clean, which is why Steps 1 to 3 come first.

When it is time for new software

Better habits will not fix a tool that cannot do the job. Consider an inventory system or ERP when:

  • You run more than one warehouse, branch or online channel and stock has to move between them.
  • Several people edit the same spreadsheet and you cannot see who changed what.
  • You need reorder points and low-stock alerts rather than someone checking manually.
  • Purchasing, sales and accounts keep re-entering the same numbers.
  • You need batch, expiry or serial tracking for customers or regulators.

Before choosing, decide whether you need a full ERP or only a stronger inventory layer connected to the accounting tool you already use. Our earlier article on moving from Excel to ERP in manufacturing covers the bigger switch, and omnichannel inventory for retail covers keeping online and store stock in sync.

Where Ascent24 fits

BestERP, one of Ascent24's products, includes centralised inventory, procurement and multi-warehouse management, low-stock alerts and an Inventory Hub mobile app for stock and warehouse work. If your accuracy problem is really a tools problem, we can help you work out whether BestERP or a custom integration fits. Write to info@ascent24.io.

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FAQs

What is a good inventory accuracy rate?

It depends on your products and tolerance rules. Measure your own baseline first and aim to improve it month by month, with the strictest standard for high-value items.

How often should we do cycle counts?

Little and often. A few minutes of counting each day, weighted towards high-value and fast-moving items, usually beats one large annual count.

Do we need an ERP to fix inventory accuracy?

Not always. Many gaps come from process habits. Software helps when you have several locations, many users or need automatic reordering.

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