How to Manage Inventory with Dynamics 365 Business Central

If your business involves products, you are aware that inventory can mean everything when it comes to profit. Too little inventory can result in unhappy consumers. Too much inventory ties up cash and shelf space, which is inventory being wasted. Microsoft Dynamics 365 Business Central is about to change all of that.  

Dynamics 365 Business Central inventory management is here to make it possible to have a sales and purchase period for precisely what you like-without the stress. 

Learn how to control your inventory using Dynamics 365 Business Central to remove guesswork, reduce manual control, and keep proper levels of inventory.  

What is Dynamics 365 Business Central?

Dynamics 365 Business Central is Microsoft’s all-in-one ERP solution intended for small to medium-sized businesses. It merges your accounting with sales, purchases, inventory, and operations on one platform. Everything that occurs on the systems and applications is interconnected in real time, enabling your team to make smarter decisions without moving from one app or system to another. 

Besides serving you with an inventory package or legacy ERP system, the solution is a SaaS-based ERP with scalability and intelligence. Integration is provided with Microsoft 365 Apps and includes automation of operational tasks with real-time information to support the day-to-day optimization of your organization. Business Central scales with your organization as it grows, keeping you organized, agile, and fully in control. 

See how Business Central can change your inventory and operations, streamlining processes, improving accuracy, and driving smarter decisions. 

Explore our Business Central services 

Why Inventory Management is Important?

Inventory management must be done efficiently to control costs, satisfy demand, and undisturbed the flow of your business. Poor stock management leads to lost sales, inordinate costs of stockholding, and hindrances to decision-making. 

There are a lot of issues that come with inventory management; Business Central helps eliminate all these issues through updated inventory tracking, automated resupplying processes, and centralized inventory control. Your guesswork will be replaced with intelligent systems using connected tools that ensure inventory levels are correct and that you can run your business smoothly. 

What are the Major Inventory Features of Dynamics 365 Business Central?

Business Central comes with a range of built-in utilities for streamlining and automating inventory transactions. Here is a cursory overview:  

• Real-Time Inventory Visibility: Know what stock you really hold, have in order, and what is running low so that you may make decisions impulsively. 

• Automatic Replenishment: Set minimum and maximum stock levels. On reaching the minimum stock levels, based on demand and lead time, Business Central will automatically generate purchase orders for you.  

• Multiple Locations and Bins: In case your inventory is in one or more warehouses or retail outlets, Business Central keeps your inventory orderly and traceable. 

• Lot and Serial Number Tracking: Track a product from receipt through to sales, and it is particularly important in those industries where compliance or recalls are pertinent to the product. 

• Methods of Inventory Costing: Business Central provides various inventory costing methods, including FIFO, LIFO, Average, or Standard costing. Business Central takes care of the accounting functions behind the scenes. 

How to Manage Inventory in Business Central 

Managing inventory is easy and efficient with Business Central. From creating items to managing purchase orders, everything in between will help you gain accuracy and minimize excess inventory while implementing process improvements. 

Step 1: Set Up Your Items

Navigate to Items > New and create your Inventory Item. Here you will define 

• Item Name & Item Number 

• Base Unit of Measure (e.g., pieces, boxes, meters) 

• Costing Method 

• Replenishment options 

Step 2: Set Inventory Locations

Navigate to Warehouse > Locations to establish your warehouses or storefronts. Determine if you will use bins for exact placement of goods, thus optimizing space and monitoring your items. Setting multiple locations would also allow you to check stock levels in your area in real time. 

Step 3: Input Levels of Inventory

Create your opening balances or actual counts in the system. Business Central allows you to bring over data from an Excel document, making it easier to transfer your stock data. This step guarantees that your record of inventory is accurate based on your actual stock levels from Day 1. 

Step 4: Document Movement

You will use transfer orders to transfer stock to another location, and item journals, i.e., can be used when adjusting for damage, shrinkage, or stock take. Any movement is recorded, providing full traceability and carefulness and ensuring accuracy in inventory through your storage spaces and warehouses. 

Step 5: Perform Demand Forecasting

Use your historical sales data, with the trends in Business Central, as a tool to perform demand forecasting. This will help you better optimize the replenishing of stock and avoid overstocking situations, as well as seasonal spikes or marketing campaigns. You can adjust how much you need based on your actual shop insight and the conditions of the current market. 

Step 6: Create Purchase Orders Automatically

Business Central allows you to set Reorder Points and Lead Times for any inventory item. When your stock levels fall below the threshold, Business Central creates a purchase order or sends you an alert automatically, which saves time and streamlines your inventory process. You can also set up vendor preferences, delivery times, and order quantities for better inventory purchasing plans. 

Common Inventory Problems and Business Central Solutions

Inventory issues can quietly restrict operations and impact profits. Business Central provides intelligent automation, real-time information, and centralized control to solve these common issues and allow you to manage your stock with more accuracy and less difficulty. 

Incorrect stock visibility: Business Central provides real-time tracking and automatic updates to your inventory visibility. 

Reorders missed: Automatically generates replenishment (restock) orders when stock is at the reorder point. 

Data entry overload: Enjoy barcode scanning and automatic integration with Excel to help manage data entry. 

Confusion with multiple warehouses: Centralize warehouse and bin management for better clarity and control. 

How do Businesses use Dynamics 365 Business Central for inventory management? 

Imagine you are a mid-size electronics distributor with three warehouses, over a hundred SKUs, and growing demand from customers. Managing inventory in a manual method became difficult, time-consuming, and error prone. 

Before: 

• Excel files everywhere 

• Overstocked inventory sitting idle 

• Missed sales because of out-of-stock products 

After implementing Business Central:

• Inventory levels are consolidated across all three warehouses. 

• Purchase orders are created automatically, based on customer demand. 

• Employees spend less time on data entry and more time on strategic initiatives.  

Optimize Inventory Management with Evolvous and Business Central

Manage your inventory with Dynamics 365 Business Central as a better way to manage stock, automate reordering, and improve visibility across locations. 

Evolvous will be your implementation partner and will provide a customized solution that meets your business needs, for retail, distribution, or manufacturing. 

Let us help you get started with Business Central today. 

Schedule your free inventory strategy session

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