Cin7 inventory management software is an essential tool for businesses to efficiently manage their inventory of products, components, and materials. It allows companies to manage all their inventory from one location by monitoring inventory product levels, sales, supply orders, and production. The entire platform runs on a cloud-based server, making it accessible on any mobile device or computer with a high-speed internet connection.
The Cin7 dashboard contains all the software’s primary controls and options. It lets you set permissions, assign user roles, and view the status of orders and bills. More importantly, it features a key performance indicator section that provides an overview of all your inventory’s critical key performance indicators.
What are the Key Performance Indicators?
Key performance indicators are crucial performance measurements of your business operations. A business owner must examine these indicators to understand their organisation’s current strengths and weaknesses. Based on the results of these indicators, a business owner can implement the necessary changes to improve certain areas of their operations that are lacking or falling behind.
Cin7 inventory management software makes it easy to track the most critical key performance indicators of your operations. Businesses like yours should monitor these indicators to improve and maintain their operational efficiency and financial health.
Let’s review the top 11 key performance indicators that you can track with Cin7 software:
1) Revenue
Revenue is the total amount earned from all the generated sales within a particular period, such as a month or year. Some businesses refer to revenue as gross profit or gross income because it does not factor in the expenses associated with generating the revenue. But if you can see your gross profit at a glance and compare it to your net revenue, you will have a better understanding of how your expenses are eating into your profits.
2) Net Revenue
Net revenue, also known as net profit, is the total amount earned from the total generated sales within a particular period after all operational expenses are deducted from it. For this reason, your net profit will be a smaller amount than your gross profit.
3) Pending Orders
Pending orders highlight the total value of your company’s current pending orders or sales. In other words, these are the orders that have been initiated and authorised by buyers but have not been paid by them yet. Once the orders get paid, the figures become part of the revenue and net revenue.
4) Due
The due amount refers to the total amount owed in customer invoices that have not exceeded their due dates. Checking the current amount due can help you regularly assess your business’s financial health. After all, paid invoices are the key to increasing profits and sustaining business operations.
5) Overdue
The overdue amount refers to the total amount owed on customer invoices that have exceeded their due dates. You must focus even more attention on this amount because it represents all the customers who have yet to pay their invoices on time. If this amount gets too high, it could spell trouble for your business’s financial health.
6) Inflow
Inflow refers to the total amount of cash flowing into the business. Part of this inflow is cash revenue from paid invoices, but it is not limited to revenue. Inflow represents all cash flowing into the business, including borrowed money. As a business owner, you need to see your cash inflow amount to assess your business’s liquidity to pay for expenses and emergencies.
7) Outflow
Outflow refers to the total amount of cash flowing out of your business. Cash outflow basically represents all the paid expenses associated with running your business, such as paying employee salaries & wages, marketing, dividends, income tax, maintenance costs, equipment, inventory, and so on. The outflow amount should always be smaller than the inflow amount.
8) Inventory Turnover Ratio
The inventory turnover ratio is a calculation that determines your inventory turnover rate. You divide the total cost of the goods that were sold by the average value of the items in your inventory. A high inventory turnover ratio means you have been selling much of your inventory and generating high sales for your business. A low inventory turnover ratio means you have too much inventory and not enough sales.
9) Inventory Holding Period
The inventory holding period indicates the amount of time your business keeps products in its inventory before finally selling them. The software calculates the inventory holding period by dividing the average value of the inventory by the total cost of the sold goods. Then, it takes that total and multiples it by 365.
10) Cost of Goods Sold
The cost of goods sold refers to the direct expenses associated with producing or purchasing the stock goods in your inventory. If your business creates its stock goods, the cost of the goods could include the expenses of purchasing raw materials and paying employees.
11) Sell-through Rate
The sell-through rate calculates the amount of goods sold in your inventory versus the amount of goods received in your inventory within a specific period, such as a month. It is a critical indicator for determining how many product units your business has sold compared to the excess supply still left. The formula for calculating the sell-through rate is to take the total number of units sold and divide it by the total number of units received.
Get Professional Assistance
How would you like professional assistance in incorporating Cin7 inventory management software into your organisation so that you can effectively track its key performance indicators?
Bluehub has inventory management consultants who specialise in helping businesses integrate top inventory software programs like Cin7 into their organisations. Furthermore, the consultants can show you how to gain insights into critical key performance indicators to improve your business’s productivity and profitability.
