Barcoding and Inventory Management

By Annapoorna


Updated on: Jul 1st, 2022


5 min read

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Barcode inventory management software is used by businesses to allocate a value to each product they sell. They can correlate the value with various data elements, such as the vendor, product dimensions, volume, and perhaps even how many goods are in storage.

Components of a Barcode System

To use barcodes for inventory management, you must first know the fundamentals of a barcode system. There are three major elements:

  • Barcoding hardware

Based on the sort of system you are scanning with, barcode hardware consists of physical elements such as scanners, printers that print, charging points, and several wires. Your products and stock-taking requirements determine the sort of barcoding gear you use and your operating environment. As a result, while some businesses will find cable barcode scanners sufficient, others will want cordless scanners to complement the online inventory management. 

  • Barcoding software

Barcoding software is essential for you to interpret and store the data. That’s where the inventory management system comes in. Most inventory management systems are designed to accommodate if barcoding is required. This will allow for the quick and efficient gathering of incoming product data with a single scan per separate item. For comparable items, they can all be put in storage simultaneously by scanning the code for one and calculating the arriving stocks.

  • Barcode

A barcode is a one-of-a-kind graphic bar with numbers or text below, similar to what you find on grocery merchandise. The graph visually conveys data. When a barcode is scanned, an item’s data is immediately sent to a system.

Every Stock Keeping Unit (SKU) has its barcode, so a 6-pack of drinks, for instance, will have a distinct barcode than that of its larger case. Barcodes can always be scanned with fairly close precision.

Is a Barcode Inventory System Suitable for Your Business?

Before installing a barcode inventory software, you must first assess whether it is appropriate for your business. This technique will most certainly assist you if you oversee any physical inventory. 

  • Keeping inventory in a storage facility: Handling hundreds and thousands of goods in a warehouse without a method to manage them might be overwhelming.
  • Barcodes needed by your suppliers or merchants: Even if you can get by without a barcode inventory model, the suppliers or retailers you deal with will demand barcodes for the goods they buy from you.

How to Start Using a Barcode Inventory System?

The following five steps will help you set up your barcode inventory system.

  • Create your SKUs

You need to make a database of your SKUs or Universal Product Codes (UPCs), making inventory management easier. Each inventory product should have some or all of the following descriptors:

  • Dimensions of the item
  • The cost of purchasing
  • The minimal amount of inventory required
  • The item’s physical characteristics
  • Select a barcode inventory software system

Barcodes are ineffective until they are linked to an inventory software system. Here are a few essential features to keep an eye out for:

  • Mobile phones that could be used as barcode scanners.
  • Orders can be sent to employees on the floor, inventory may be scanned, and data can be transferred wirelessly.
  • Printable barcode labels displaying sales prices to provide the information to your clients and staff.
  • Decide which kind of barcodes you need to apply

The sort of barcode you use is determined by the amount of data you have to encode into them. If you have a smaller inventory and only have to track a limited amount of details, 1D barcodes will most likely suffice.

If you have a massive database of SKUs and have to monitor specific data, 2D barcodes (such as QR codes) are likely the preferable solution.

  • Make your barcodes

You will need to generate barcodes for your inventory using your inventory management software.

  • Put barcodes to manage your inventory

This is the easiest and most significant step in the procedure. Use a barcode printer to print your tags, then stick them to each item. Keep in mind to make the tag visible so it may be easily scanned.

Best Practices in Barcoding

It is critical to contemplate and educate employees on efficient barcoding practices to be followed in your company. Consider the following three other components of barcoding best practices in managing inventory:

  • Prevent double-dipping

If one employee scans items while removing them from the warehouse for use in production and another scans them after being utilised in production. Then there’s also the possibility of ‘double-dipping’ or missing tallies. You should take proper measures to avoid double-dipping.

  • Make good use of supplier barcodes

Suppliers will have already barcoded many products. However, the same product from multiple vendors may have various barcodes at times, and in other cases, separate vendors may reuse the same barcodes for distinct products. If that’s the scenario, it may be smart to invest in new barcodes and apply them.

  • Utilise standardised barcodes

As many organisations utilise the same unique identifier and symbology, similar barcodes for various products are frequently used.

Self-generated barcodes are suitable for internal usages only, such as tracking resources or partially produced goods. On the other hand, products supplied to customers should normally employ a standardised, authorised barcode.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more


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