Pitfalls of using excel for inventory management

Excel for inventory management

If you started with Excel recently, you might have not faced it’s limitations yet! But a single error via Excel can also be an expensive affair; Forbes states Microsoft’s Excel Might Be The Most Dangerous Software On The Planet – this coming from Forbes, we think you’re starting to understand the criticality of dangers Excel comes with!

A perfect switchover for Excel is the automated inventory management software]. Better to adopt one before its too late to get in the game- all your competitors already are!

Inventory being one of the most important assets of a retail business, needs to be monitored and controlled carefully. You might have upgraded from using pen and paper to a ready-made inventory management Excel template. But ain’t it time to amp up and get into Inventory Control and management?

Inventory Spreadsheet


MS Excel has functional flaws which can cause the following problems while managing your inventory:


1. Managing Orders

  • Orders that come in from multiple sources need to be recorded manually in Excel, which delays the order fulfillment process.
  • Screening and searching orders become way too monotonous, even with SORT functions.
  • Lacks prioritization of Orders as it can be arranged only via Date, Alphabet, etc. by which orders are fulfilled in chronological order, skipping priority or special orders.
  • Order status, stock count and delivery are never in real-time as it gets updated minutes later. This decreases the Order fulfillment rate as more time is taken to fulfill and process them.


2. Product Categories

  • Excel is full of rows and columns, making it a flat-face for analysis. It has a fixed layout that can’t absorb changes and unexpected scenarios making it an inflexible tool.
  • There are around 10 parameters pertaining to a product- Product Name, Description SKU, Stock location, Supplier, Current Stock level, Reorder Point, Cost Price, Retail Price, Quantity ordered and more. It is highly inconvenient to keep updating the respective numbers for each product again and again in hundreds of cells.


3. Lost Returned products

  • It’s not possible to link a particular returned product is of which respective Order in Excel. Separate Sheet for Returns needs to be created which just shows returns data and then connecting 2 sheets via V-lookup might just make a bit sense, but it’s an inefficient way of dealing with Returns.
  • When a product is returned, you can treat it in one out of the 3 ways: fresh stock, refurbishing or discarding. In Excel, storing this data segregated is a lengthy task as you have to sort each product every time into these categories.


4. Formula Fuss

  • Choosing between n number of formulas and arranging the data in accordance can take up a lot of time, let’s not talk about doing it multiple times!
  • Accurately applying formulas all the time is a tough task. Mainly because there are high chances of errors, miscalculation, misreading and duplicating of the data.
  • Entering formulas, linking data with each other, and applying various conditions to the data can be a time- & energy-consuming process which needs undue constant attention of the person recording it.


5. Narrow idea only

  • No past record reviewing or transaction history stored anywhere. If you want to find a transaction occurred years ago, you need to put in many filters and press various keys to get the data out of Excel.
  • No combined information of the whole inventory is available. Excel can’t ever show you the Big Picture. Eg. data relating to multiple warehouses or selling channels, complete product range, etc.
  • Excel can easily get too complex and limits quick data analysis or a clear overview leading to lack of control.
  • There is almost next to no provision for forecasting, reporting and analysis. Basic mathematical formulas and graphs can’t predict real business scenarios.


Still, if you wish to manage your inventory using excel template, click the image to get our exclusive inventory excel template for free!

Inventory Spreadsheet



Ritu Shah

Ritu Shah

A writer on weekdays, a traveler, swimmer, and dancer on weekends! With family above everything, this bubbly word-artist plans to stride across everything in her life, one-step-at-a-time. All set to spread her aura at Orderhive.

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