Inventory Management Instead of Paperwork in Retail

Why a merchandise management system pays off for your retail business

Table of contents
  1. What is a merchandise management system in retail?
  2. What is the benefit of a merchandise management system in retail?
  3. What are the advantages of merchandise management in retail?
  4. What is the difference between an ERP system and a merchandise management system in retail?
  5. The functions of a merchandise management system and an ERP system in comparison
  6. From what size of company is a merchandise management system sensible?
  7. Which merchandise management systems are there for retail?
  8. How does purchasing work with a merchandise management system in retail?
  9. How does the sales process work with a merchandise management system in retail?
  10. What are the tasks of the warehouse management?
  11. How does inventory work with a merchandise management system in retail?
  12. How is a cash register system integrated into a merchandise management system?
  13. How does the collaboration between merchandise management and accounting work?
  14. What is reporting?
  15. What is meant by customer management?
  16. What is a CRM system?
  17. How are the tasks of different employees taken into account in the merchandise management?
  18. Conclusion: Merchandise management system in retail? Yes, please!

You're contemplating implementing a merchandise management system in your retail business, but don't know where to start? In this article, we explain to you the benefits a merchandise management system can have for your company, from what size a software makes sense and how both the purchasing and sales process of your company can look with a merchandise management system. You will also learn the difference between an ERP system and merchandise management in retail and the role accounting, reporting and customer management play in it. Have we piqued your interest? Then stay tuned and become merchandise management experts!

What is a merchandise management system in retail?

A merchandise management system - also known as merchandise management or WaWi - is a computer-aided procedure to support regular processes in a retail business. These processes particularly include purchasing, inventory and sales. With the help of software, structured processes are defined, thus precisely defining sequences.

The aim of merchandise management in retail is efficient handling of goods, documenting all inventory and movement data, and precise control of the flow of goods. This way, it can be ensured that there is enough merchandise available at any time.

What is the benefit of a merchandise management system in retail?

In retail, merchandise management primarily serves the administration, planning and control of goods. It includes the following steps that the goods go through:

  • Purchase
  • Goods receipt
  • Storage
  • Sales
  • Despatch
  • Exit

Thanks to a retail merchandise management program, you can accurately document these processes and thus capture the entire flow of goods in your company's business process. To document everything correctly, merchandise management works closely with the logistics and disposition departments.

Depending on the type of company, the company processes vary. So you should choose a merchandise management system that suits your company. At OMR Reviews, we have summarized these and many more software solutions for you and our users have rated them.

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What are the advantages of merchandise management in retail?

Whether in wholesale or retail, merchandise management systems support you in many areas and bring with them several advantages:

  • The process is clearly regulated and documented.
  • Processes are made reproducible independently of the responsible person by systematic processes.
  • You can easily divide individual areas of responsibility among different people.
  • You can create offers, orders and invoices more easily and quickly.
  • Data maintenance takes place in a single system.
  • You keep track of the flow of goods in multiple operations and warehouses at the same time and in real time.
  • With current statistics in the system, Wawi helps with assortment optimization.
  • You always keep an eye on your company's finances.
  • Merchandise management helps you increase your company's success.

Recommended Merchandise management systems

On our comparison platform OMR Reviews you can find more recommended inventory management systems. Wir stellen über 300 Lösungen vor, die speziell auf die Bedürfnisse von kleinen und mittleren Unternehmen, Start-ups sowie Großkonzernen zugeschnitten sind. Diese Warenwirtschaftssysteme bieten umfassende Unterstützung in allen Unternehmensprozessen. So take a look and compare the software with the help of authentic and verified user reviews:

What is the difference between an ERP system and a merchandise management system in retail?

Enterprise Resource Planning (ERP) and merchandise management are often used synonymously. However, ERP systems cover many more functions than merchandise management systems. Merchandise management focuses on optimizing the flow of goods. An ERP system, on the other hand, offers comprehensive solutions for retail. So it covers more functions than a Wawi.

With the help of an ERP system, you can collect, analyze and forward data and information from all processes and departments of your retail business. You can also use an ERP system for production planning or customer care and communication. An ERP system is, therefore, an expanded merchandise management system for retail.

The functions of a merchandise management system and an ERP system in comparison

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If you're now curious and want to compare the best ERP systems then take a look at OMR Reviews. Where our users have tried out and rated the most popular ERP systems for you.

From what size of company is a merchandise management system sensible?

Depending on the merchandise management system, the recommendation for the minimum size of a company varies. We recommend many of the best-known merchandise management solutions to you only from a company size of about 1,000 employees. The reason for this is that most processes should already have been recorded when introducing merchandise management in a large company. They can then be implemented easily in the software.

But merchandise management systems can also be sensible for smaller companies. For example, if you run an online shop or are active in retail, a Wawi pays for itself from around 40 orders per day. In addition, the implementation process in smaller companies is much simpler. The larger the company, the more complex and cost-intensive the implementation of merchandise management is.

Which merchandise management systems are there for retail?

The following top 5 merchandise management systems help you with the capture, planning, and analysis of the flow of goods in retail:

The cloud-based software supports you in order processing, including (automatic) creation of order documents, payment matching, shipment processing, or email dispatch to customers. With Billbee, you can also centrally manage and reconcile your inventory across channels.

This is an all-in-one office software that is helpful for both SMEs and service providers, tradespeople and self-employed. The software supports you in accounting, financial management and merchandise management, including inventory management, cash register system, tax evaluations or e-commerce connection.

The ERP software assists you in analyzing large amounts of data, implementing new business models and coordinating resources. The software is aimed at companies of every industry and size.
⁠All SAP's tools can be found on our overview page of the software manufacturer. 

With weclapp you can control all important business processes on a cloud ERP platform. The tool offers CRM, merchandise management, project management, or accounting software solutions.

The ERP software helps you with automated business processes. The tool has financial accounting and a connection to online shops and online marketplaces.

Further merchandise management systems for retail

How does purchasing work with a merchandise management system in retail?

In order for you to sell goods in your retail business, you first have to procure or purchase them. The purchase using a merchandise management system usually takes place in six steps:

Step 1: Demand determination

First, you have to determine how high the demand for a certain product is.

Step 2: Ordering proposal

You can either enter the order proposal manually or your merchandise management system automatically suggests the order of the desired goods. The system pays attention to the signaling stock of the goods, which was previously defined by you. So if the stock of a certain good is too low, the software informs you about it.

Step 3: Request management

Once the scope of delivery is fixed, request management comes into play. One or more requests are sent to suppliers. Once the price and delivery time is clarified, it moves to the next step.

Step 4: Order

Once you confirm the order, The WaWi creates an order number. This is used as reference and comes into play, for example, in communication with suppliers. So your merchandise management system always knows which order it is.

Step 5: Receipt of goods

If the ordered goods are delivered, you can book them into the inventory in the Wawi. The software then knows that the order has arrived and adjusts the inventory accordingly. Additionally, we advise you to always physically check the goods. Is the ordered quantity present and does it meet quality standards?

Step 6: Invoice verification or complaint

If you are satisfied with the goods, you can check the charged price again in the merchandise management system. If the quantity, quality or price doesn't match, you can trigger a complaint with the help of Wawi. This is then sent directly to the suppliers.

During the entire purchasing process, you should record all documents such as order confirmation, delivery note, but also emails in the merchandising management system of your retail business. For phone queries, you can manually add notes. So you can be sure that all important documents are collected and stored in one place. The merchandise management system thus offers you a detailed overview of all orders.

How does the sales process work with a merchandise management system in retail?

There are two cases in which you can use your merchandise management system in sales:

  • Business-to-Business sales (B2B sales): You sell your goods to another company. 
  • Business-to-Consumer sales (B2C sales): You sell your goods directly to your end customers.

Depending on the type of sale, the goods sale using merchandise management takes place in four or five steps:

Step 1: Inquiry and offer (only for B2B)

You receive an inquiry from your customers, which is recorded in Wawi. The merchandise management system then accesses master data of customers, prices, delivery times and inventory information. Using the merchandise management software, you create a suitable offer and transmit it to the interested parties.

Step 2: Order and Job

When customers trigger an order through your quotation or online shop, Wawi records it. The software then automatically sends an order confirmation to your customers.

Step 3: Shipping processing and goods issue

For shipping processing, your merchandise management creates all necessary documents such as a delivery note, packing list, and shipping label. Then, you can take the sold goods from the warehouse and prepare them for goods issue. If you work with parcel service providers, it makes sense to use this interface here. The merchandise management system for your retail business transmits all necessary data such as destination address, weight, and dimensions to the shipping service providers. Your goods are then 'ready to go'!

Step 4: Invoice creation

Your Wawi creates the invoice using the data in the system. So you can send your customers the invoice for the received goods promptly.

Step 5: Receivables management

Your merchandise management's receivables management gives you an overview at all times of unpaid invoices and outstanding receivables.

If a complaint or return is made, you can also control the process with your Wawi. It records the claimed return, provides the return information, and may create a return label.

What are the tasks of the warehouse management?

Warehouse management is one of the most important instruments of your merchandise management system. You should know at any time what is in your warehouses. In addition, with a well-organized warehouse management, you do not only do your warehouse staff a favor, but also your corporate wallet.

For inventory management, your Wawi records either the quantity or weight of the goods. Depending on the type of goods, you can create various categories of information for the merchandise management to document (e.g. various sizes or colors). Apart from the actual stock, your merchandise management system also takes into account outstanding orders. So you always have an overview of your stock.

How does inventory work with a merchandise management system in retail?

Are you obligated to create a balance sheet with your company? Then you must also carry out an inventory regularly. An inventory can also be part of inventory management. Here we distinguish three types of inventory:

  • Continuous Inventory: With continuous inventory, you have to count your goods all year round - i.e. continuously. Here it makes sense to divide the goods into different categories.
  • Census inventory: With the date inventory, you record the inventory on a certain day of the fiscal year - the date.
  • Annual inventory: The annual inventory takes place once per fiscal year. As a rule, it is carried out at the end of the year. You have to count the total stock of all your warehouses.

You can record the inventories either manually using a manual list or electronically using mobile input devices. There are also special Mobile Data Entry (MDE) devices for this, which enable scanning of the goods. Your merchandise management supports both manual and electronic recording.

In addition, the Wawi helps you with the inventory evaluation of your retail business. Among other things, it corrects differences and automatically corrects errors in the system. The software can also carry out the balance-sheet-correct depreciation of goods.

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How is a cash register system integrated into a merchandise management system?

If you are active in stationary trade with several locations, you already know how important a good cashier system is for the company. So you can exchange data smoothly, check inventory levels, and run the reporting system efficiently.

For the successful operation of your business, the cash register system and the merchandise management system should mesh seamlessly. Nevertheless, most software solutions are cash register systems that only superficially have the qualities of a merchandise management system. In many cases, you would therefore need an interface. The cash register system and the WaWi are then two separate systems that exchange data with each other. In this data exchange, however, important data can be lost.

So we advise you to go for a 'complete package'. This not only saves you unnecessary work but also allows you to check the flow of goods at the cash register in real time at any time and check the inventory levels. Most cash register systems also have useful functions for complying with the Principles of proper accounting (GoB).

  • Automatic creation of an accounting report
  • Automatic creation of a day-end report
  • A digital cash register
  • Employee management
  • Create sales reports per hour, item or employee.

Thanks to these functions, you can concentrate on the important things in your business and don't have to worry about unnecessary paperwork.

How does the collaboration between merchandise management and accounting work?

Depending on the size of the company, the type of collaboration between merchandise management and accounting varies. While in-house accounting is usually integrated into the merchandise management systems of large companies, small and medium-sized enterprises rather cooperate with external companies. They mostly rely on external tax consultants or accounting firms. For this, special accounting software is used.

If you want to learn even more about accounting or are looking for a free accounting tool or an accounting software for small businesses then scroll through OMR Reviews. There you will find the most popular accounting tools compared.

What is reporting?

Reporting - also called reporting - deals with the creation of reports for a company. These reports include, among other things:

  • Balance sheet
  • Income and loss statement
  • Customer evaluation
  • Cost analysis

Reporting is thus one of the key functions of a merchandise management system. With the help of Wawi, you can statistically analyze all data and summarize it in reports. The reports serve you as a basis for decisions regarding marketing measures or assortment planning. Depending on the merchandise management, you can manually initiate the reports or have them created automatically and regularly.

What is meant by customer management?

Customer management serves to store data. In customer management, for example, you can store all important data of your customers, suppliers, and other contacts. This includes not only name, address, and telephone number but also travel routes and services.

What is a CRM system?

Customer Relationship Management (CRM), often called customer care in German, is an advanced customer management. With the help of a CRM software you can capture all customer information and use it to improve customer communication. So you can adjust marketing measures, optimize newsletter dispatches, and position promotional campaigns correctly. The needs of your customers are always at the center of the system.

How are the tasks of different employees taken into account in the merchandise management?

Depending on the area of responsibility, other functions of merchandise management come into play. For example, employees in the warehouse use different functions than employees in administration. To show the responsible employees their respective areas of responsibility and manage possible access rights, merchandise management systems in retail have a user management. This way, it can always be traced back which users triggered or edited a process. Most employees are active in the following roles:

  • Administration
  • Accounting
  • Back office
  • Cash register use
  • Management
  • Marketing
  • Sales
  • Storage
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Thanks to user management, you can check at any time who has performed which task. In addition to user management, merchandise management systems also have task management. With the help of this tool, you can create tasks manually or automatically and enter them into the system. These can then be assigned to the respective employees. These are usually a specific part of merchandise management (e.g. creation of a customer offer). Once this task is completed, the subsequent step can be released for the next responsible person. This allows you to enable your employees smooth communication and collaboration. And you are always up to date.

Conclusion: Merchandise management system in retail? Yes, please!

A merchandise management system has many advantages for companies of all sizes. Especially small businesses in retail, we recommend jumping on the merchandise management train as soon as possible - because the smaller the company, the easier the software implementation. Apart from customer and user management and reporting management, a merchandise management system especially supports you in warehouse management and the automation of different company processes. So whoever still relies on paperwork in the company and tries to keep track of all processes should switch to merchandise management by now.

Sarah Magdalena Huber
Sarah Magdalena Huber

Sarah ist sprachaffin und liebt Herausforderungen. Die gebürtige Österreicherin verfasst und übersetzt Texte in Deutsch, Englisch und Spanisch. Sie ist seit einigen Jahren selbständige Übersetzerin und Dolmetscherin und schreibt als freie Redakteurin bei OMR Reviews zu den Themen Software und Co.

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