Inventory Systems in New Zealand

Work out what your inaccuracy costs

This is the number that decides whether the project is worth doing, and most briefs arrive without it.

Add up, for the last twelve months:

• Stock you wrote off because it expired, or because nobody knew you had it.
• Freight paid to rush something you already had in another branch.
• Sales you could not take because the system said zero and the shelf said four.
• Hours spent on stocktakes, and hours spent arguing about the result.
• Cash sitting in stock you would not buy again.

For a business turning over a few million, that figure is routinely six figures, which makes an $80,000 system a straightforward decision. If it comes to $15,000, buy a subscription product and stop reading.

Rule out the shelf first

New Zealand is unusually well served here. Unleashed is a local product. Cin7 began in Auckland. Both talk to Xero natively and both handle standard wholesale and retail properly.

They struggle when your stock does something out of the ordinary, and that is where custom work earns its money:

• Stock that is not on a shelf — inventory in vans, on job sites, with contractors, or on consignment at a customer's premises.
• Things made of other things — kitsets and assemblies built to order, where selling one product consumes six others.
• Odd units — sold by the metre, bought by the roll; priced by weight, counted by the piece.
• Serious traceability — batch and expiry for food or medical, serial numbers you must be able to trace to a customer years later.
• Stock as part of a bigger job — where inventory only makes sense inside your quoting, scheduling and invoicing.

Ask every developer quoting which off-the-shelf product they considered and what it would have missed. If none of them mentions one, they are not thinking about your money.

How stock is counted decides how good the data is

A system is only as accurate as the moment stock moves, and the enemy is typing.

Barcode scanning on a phone costs nothing extra in hardware and is right for most businesses. Dedicated rugged scanners are worth it for high-volume picking, for cold stores where phones and gloves do not co-operate, and where staff scan for hours a day.

Whichever you choose, ask what happens with no wifi. Warehouses have dead spots, coolstores are metal boxes, and rural sites have neither. An app that queues movements offline and syncs when it can is more expensive than one that does not — and the cheaper one produces stock records with holes in them.

Get the accounting treatment agreed before the build

Inventory is on the balance sheet, and how it is valued is your accountant's decision, not your developer's. Settle it early:

• Average cost, FIFO or standard cost?
• Does landed cost include freight, duty and insurance, and how is it spread?
• Who is allowed to write stock off, and what approval does it need?
• What reaches Xero — every movement, or a periodic journal?

The usual pattern is that the inventory system holds the detail and Xero receives the accounting summary, because Xero's own tracked inventory is deliberately simple. Get your accountant in the room for one hour during quoting; it will be the cheapest hour of the project.

The opening balance is the whole project

You can build the best inventory system in the country and load it with the numbers from the spreadsheet you already do not trust. What you will have then is the same wrong data, presented with more confidence.

Plan for:

1. A real, full stocktake close to go-live.
2. A named person who owns accuracy afterwards.
3. Adjustments that require a reason and record who made them.
4. Cycle counting — a section a week — instead of one enormous count a year.

Ask each developer how they have handled a go-live stocktake before. The ones who have done it will have a plan involving a weekend and a freeze on movements. The ones who have not will say it is a data import.

Comparing five quotes

The prices will spread because the scopes will differ. Read for:

• Who named an off-the-shelf product and said what it would miss?
• Who asked about wifi coverage in your warehouse?
• Who asked how you value stock, and who wanted your accountant involved?
• Who has done this in your industry — trades, food, wholesale, manufacturing?
• Whose quote includes the go-live stocktake and the first month of corrections?

Describe what you stock, where it sits, how it moves, and the one thing about your stock that never fits normal systems. That last sentence is what separates a $40,000 quote from a $160,000 one, and you are the only person who can write it.