11 Inventory Reports Every Enterprise Business Must Track + How to Do It
Many ecommerce businesses start out small, often shipping inventory from a garage or spare room. At that stage, you need little more than basic accounting to keep up with orders and inventory. As you scale though, using data and the correct inventory reports to generate insights, track profitability, and manage costs becomes increasingly important—and complex.
Inventory reports are a key aspect of that, enabling retailers to document, track, and analyze sales, inventory movement, and even profitability.
How do you tell when you’ll run out of stock? At what point do you order new inventory? What is your stock control process based on? As you grow, being able to answer those and other questions with credible data will ensure robust operations and encourage continued profitability.
What Is an Inventory Report?
An inventory report summarizes data about stock. In its most basic form, it lists all stock a business has on hand. However, a complete inventory report can cover everything about an organization’s total inventory or track specific types of stock such as sell-out rate, rate of sale, turnover, and more.
Why You Need Inventory Reporting
Inventory report data is useful for inventory planning, tracking, organization, inventory categorization, organizational growth, and even choosing which products to keep or drop from your business catalog. This information can help you:
- Understand sales figures and where they’re made/where they come from (e.g., which products are your top selling? Which aren’t moving?)
- Learn which products sell out and how often
- Determine how fast inventory moves, what your inventory and per-product turnover rates are, and if there are products you should stock more/less of
- Decide if you can optimize current inventory per item to reduce costs and overhead
- Reveal if you can optimize product availability by prioritizing items with high turnover and if that turnover is seasonal
- Confirm the accuracy of other data and check existing quality controls for value
- Track sales and the order fulfillment process to the end result
- Manage total inventory movement and sale across all platforms
- Set minimum levels to avoid dead stock while preventing selling out
You might not have to build inventory reports specifically to gain this useful information; your inventory management software may include dashboards and even PDF exports detailing everything you need. However, you can also craft reports yourself, provided you know which KPIs to track.
11 Inventory Reports to Track
It’s important to decide what data is important to your business. Your inventory reports should showcase impactful data rather than simply listing everything. Below are 11 types of helpful inventory reports to consider tracking.
1) Inventory Performance
An inventory performance report details which products are selling well and which aren’t. It usually ranks sellers from best to worst, with data on year-over-year growth, quarterly sales, and sales mapped to specific holiday periods.
This reveals which products sell and at which times of the year so you can forecast and optimize the volume of products/raw materials to stock for the coming period.
A basic sales inventory report details sales by SKU, channel, customers, and period. Generally, the report lists total sales for the year, breaks it down quarterly, and then by holiday periods. You can then look at accounting summaries per channel. You’ll also want to specify conversions related to sales and discounts, with increases or decreases mapped to before, after, or year-over-year data where relevant.
This will help you analyze trends more shrewdly, recognize top customers, and improve your long-term forecasting.
3) Inventory Value
Understanding the value of your current total inventory affects taxes, organizational valuation, and purchase decisions. This typically includes breaking down inventory value by location and volume per location, then further down to value of SKUs and SKUs by location.
You can also calculate real inventory value based on sales price, rate of inventory turnover per warehouse, and the cost of inventory storage for a given period. How far down into the data you dig is up to you—it depends on how you’ll use the report. Additionally, they can become complex if you have products that lose value with age (for example, if you have products that expire).
4) Stock Levels/On-Hand Inventory/Finished Inventory
Stock levels (also known as on-hand inventory or, if you manufacture products yourself, finished inventory) is the total number of products ready to ship to customers. This report can be invaluable for understanding exactly how much you have at any given point.
Often, the point of a stock level inventory is to audit existing controls and ensure your actual and expected inventory match. This data can then be used to confirm inventory valuation, sales levels, and restock/replenishment rates.
5) Multi-location Inventory
A multi-location inventory report is a hyper-specific stock level report in which you hone in on inventory based on warehouse location. This allows you to confirm stock at each location, audit existing controls and tracking, and better allocate or update inventory per location.
6) Inventory Change
An inventory change report compares current inventory to that at another point in time. This measurement can confirm tracking and sales data. Additionally, it’s useful in following up on damaged goods in a warehouse or reassessing total inventory after a move or other issue.
You can also see how inventory has been updated over time and pinpoint which products are not selling out, which remain static, and newly added products in your catalog.
7) Inventory Forecasting
Inventory forecasting reports track sales data per period over the lifetime of your data collection. It’s used to forecast the inventory you should need for the coming period at your current rate of growth. To make this prediction, it uses data like inventory turnover, year-over-year growth, and sales rate on an individual product basis to calculate accurately how much of each SKU should be in your warehouse at any given period.
Longer-term inventory forecasts are useful for business planning. However, shorter-term (one to three months) predictions are helpful for replenishment and warehouse stocking decisions.
8) Inventory Profitability
Inventory profitability costs collate data such as actual cost of a product or raw materials, cost of manufacturing, shipping, delivery, warehousing, pick and pack, advertising, etc., to gauge real profit for each SKU.
As the name implies, this report determines which products are profitable and which are not. However, it’s limited in scope, missing details such as when a product contributes to closing other sales, so it’s important to obtain a more holistic view of your inventory and sales before using this kind of report to cut products. For instance, Amazon would sell their Kindle tablet at a loss, and make up the difference in longer-term sales.
Knowing your actual profit per product is important, but make sure you fully understand how those products contribute to your overall retail ecosystem as well. For example, your customers would be dissatisfied if they couldn’t purchase coffee filters with their coffee pot and coffee—even if the filters aren’t profitable.
9) Customer Analytics
A strong customer analytics report records customer purchase patterns on an anonymous basis. It should detail items like average purchase cost, number of SKUs per purchase, number of returning customers, and how often customers return.
This data contributes to customer life cycle management and inventory management. For example, if you can predict a person who buys product X is very likely to return to buy accessory Y within a year, you can use the sales of product X to predict stock needs for accessory Y for the coming period.
You can also use the report to predict data like total customer value, to see top customers, and more.
10) Cost of Goods Sold
A cost of goods sold (COGS) report calculates the total costs associated with selling your products. It’s similar to the profitability report, except the focus is on costs. Both reports are essential for taxes. However, they’re also useful in setting pricing, determining which products cost too much to sell, and prioritizing low-cost/high-profit products (e.g., if a product has a low total cost and high profitability, you likely should prioritize it).
11) Purchase Order
Purchase order reports show order history, incoming inventory, and trends in availability and cost. It reveals which stock has been ordered, projected arrival time, etc., to assist with replacement orders, warehouse management and organization, and even advertising. For example, if you know a product is back-ordered from the manufacturer, you should wait to advertise it until after you have new stock.
Building Inventory Reports
Often, you can use your existing inventory management software to generate inventory reports. In other cases though, you’ll have to do it yourself with other tools and programs.
Choose the data you want to measure and why. Start by setting a goal for the report, deciding what’s important to include and in what timeline. Say you want to audit total stock with an inventory change report. One of your KPIs would be “Total current inventory,” which you could generate from your POS or inventory management system and then validate with a manual count in the warehouse.
On the other hand, if you wanted a profitability report, you’d either have to use your POS or inventory management system to import costs from purchase orders, HR software, etc., or calculate it manually. Your KPIs would also be different, as you’d need to track metrics such as revenue, cost of sale, and total overhead for the period.
You could create Excel reports, but often, you’ll want to use a program with automation to do it for you. In addition, establish a timeline for your data collection; you have to be able to view the information in the context of year-over-year growth, sales and discounts, seasonal peaks, etc.
Wrapping up – Monitor your inventory reports to ensure successful enterprise operations
A comprehensive inventory report can cover almost every aspect of your stock, including its rate of sale, its costs, and more. However, what you derive from it depends on the metrics you track and your other established parameters. These reports are immensely valuable in helping you make informed decisions about your stock to keep your business running smoothly.