Unfortunately many SME’s don’t have access to the large corporate bailouts that offered a lifeline to the largest banks and corporations.  Collectively,  SMEs are the largest employers in the economy but face some tough choices at the moment.While the banks pay their huge bonuses to “keep the talent” that got us all into this mess in the first place, SMEs are facing layoffs or shutting the doors. Before looking at those options, effective inventory management is one step that any company can take to help it weather the storm.

Other than employees, inventory is a company’s single largest asset. Reducing inventory levels and increasing inventory turn-around can result in substantial savings on a company’s bottom line. In a nutshell, you need to get rid of the inventory you don’t sell and get more of the inventory you do. Sounds straightforward but many businesses still have the wrong mix of inventory and more don’t actually know what they’ve got.  Inventory management software will help implement a system that allows you to shed products that don’t sell and invest in those that do.

Fixed asset accounting can also make a significant contribution to cutting costs and increasing profitability. It can help manage internal and external service providers to reduce administrative costs associated with asset maintenance and repairs and provide asset-specific total cost of ownership data that can be used to reduce insurance premiums and cut tax liabilities. Effective asset tracking can also save money by reassigning idle equipment instead of having to purchase brand new plant or machinery. Leased equipment and assets can also be managed far better. Lease termination penalties can be avoided by simplifying the process of tracking and locating those assets and ensuring the equipment is returned promptly when the lease term expires.

In times like these, SMEs have to manage realistically, cutting short-term costs that they can afford to cut.  A rigorous inventory management and asset tracking system will allow you to identify which assets are mission-critical and which ones are not, so you can cut expenses and increase sales.