How to Set Up Stock Tracking in 6 Easy Steps

Setting up a reliable stock tracking system can feel overwhelming, especially when you're juggling multiple suppliers, warehouses, and product lines. The good news? With the right approach and modern procurement software, you can transform chaotic inventory into a well-oiled machine in just one afternoon.

Whether you're launching a new business or upgrading from spreadsheets, this guide walks you through every step of implementing professional inventory management that scales with your growth.

Step 1: Audit Your Current Inventory Situation#

Before configuring any software, you need a clear picture of what you're working with. This foundational step prevents headaches down the road and ensures your stock tracking system reflects reality from day one.

Start by answering these questions:

• How many SKUs do you manage? Count unique products, including variations like sizes and colors.
• Where is your inventory stored? List all locations—warehouses, retail floors, third-party fulfillment centers.
• Who are your suppliers? Document contact information, lead times, and minimum order quantities.
• What's your current reorder process? Identify pain points and bottlenecks you want to eliminate.

This audit typically takes two to four hours but saves weeks of corrections later. Export any existing data from spreadsheets or legacy systems—you'll need it for the import phase.

Step 2: Configure Your Product Catalog#

With your audit complete, it's time to structure your product database. Effective inventory management depends on consistent, detailed product records that everyone on your team can understand.

For each product, establish these essential fields:

• SKU or barcode: A unique identifier for scanning and tracking
• Product name and description: Clear enough for warehouse staff to identify items
• Category and subcategory: Enables filtering and reporting by product type
• Unit of measure: Pieces, cases, pallets, or whatever applies to your business
• Reorder point: The minimum quantity that triggers a purchase order
• Preferred supplier: Links products to your vendor database

Pro tip: Resist the urge to over-complicate your categories. Start simple and add complexity only when reporting demands it. A flat structure with ten categories beats a nested hierarchy that confuses your team.

Step 3: Set Up Supplier Management and Purchase Orders#

Your procurement software should make ordering from suppliers effortless. This step connects your inventory levels to your purchasing workflow, creating the automation that prevents stockouts.

Begin by entering each supplier with complete contact details, payment terms, and typical lead times. Then link products to their primary and backup suppliers. This relationship powers several critical features:

• Automated purchase order generation: When stock hits the reorder point, the system drafts a PO for approval
• Lead time calculations: Procurement automation accounts for shipping delays when suggesting reorder timing
• Price tracking: Monitor cost changes across suppliers to optimize purchasing decisions

Configure approval workflows based on order value. For example, orders under $500 might need only a manager's approval, while larger purchases require executive sign-off. This balance of speed and control keeps inventory flowing without budget surprises.

Step 4: Enable Multi-Location Tracking#

If you operate from multiple warehouses or retail locations, your stock tracking system must reflect this complexity. Proper multi-location support prevents the nightmare of overselling products that exist only in distant facilities.

Configure each location with:

• Location codes: Short identifiers for quick reference on reports and labels
• Address details: Essential for shipping calculations and transfer logistics
• Default receiving location: Where new shipments arrive before distribution
• Picking priority: Which location fulfills orders first based on proximity or cost

Set up transfer workflows between locations. When inventory runs low at one site, the system should suggest internal transfers before triggering new purchase orders. This approach maximizes existing stock and reduces carrying costs across your network.

Step 5: Configure Stock Alerts and Demand Forecasting#

Passive inventory tracking helps you understand the past. Active alerts and forecasting help you control the future. This step transforms your warehouse management software from a record-keeper into a strategic advisor.

Essential alerts to configure:

• Low stock warnings: Triggered when quantity drops below your reorder point
• Overstock alerts: Flags slow-moving inventory tying up capital
• Expiration notifications: Critical for perishable goods or products with shelf life limits
• Receiving confirmations: Notifies relevant team members when shipments arrive

For demand forecasting, feed your system at least three months of historical sales data. AI-powered forecasting analyzes seasonality, trends, and patterns to predict future needs. The longer your data history, the more accurate these predictions become.

Review forecasts weekly during your first month, adjusting parameters as you learn how the algorithms interpret your specific business patterns. Most businesses achieve ninety percent forecast accuracy within six to eight weeks of calibration.

Step 6: Train Your Team and Launch#

The most sophisticated inventory management software fails without user adoption. Invest time in training every team member who touches inventory—from receiving clerks to executives reviewing reports.

Structure your rollout in phases:

• Week one: Core team learns the interface through hands-on practice with test data
• Week two: Parallel operation—run new and old systems simultaneously to verify accuracy
• Week three: Full cutover with old system archived for reference
• Week four: Review metrics and refine configurations based on real-world usage

Create quick-reference guides for common tasks: receiving shipments, processing transfers, generating purchase orders, and running inventory counts. Laminated cards at workstations reduce errors and support questions.

Start Managing Inventory Smarter Today#

Implementing a professional stock tracking system requires upfront effort but delivers ongoing returns through reduced stockouts, lower carrying costs, and freed-up time for strategic work. The six steps outlined above provide a proven path from inventory chaos to operational control.

InFlow's Inventory and Procurement module handles every step described in this guide, from multi-location tracking to AI-powered demand forecasting. The intuitive interface means your team spends less time learning software and more time serving customers.

Try the Inventory Module and discover how procurement automation transforms the way you manage stock. Your future self—the one who never scrambles to explain a stockout—will thank you.