What Is ERP Inventory Management? Benefits, Features & Tools

Priya Naha

Senior Writer

Chief editor

Chief editor

ERP Inventory Management

Managing inventory is essential for online companies. Effective inventory management is based on data from various sources, including sales, restocking, shipment, logistics, storing, distribution, the satisfaction of customers, loss prevention, stock turnover, and more.

Businesses that manage their inventories well generate the most revenue. Customer satisfaction levels improve from minimal stock investment. But what’s the most effective way to manage inventory?

Enterprise resource planning inventory management makes this data easily accessible. Businesses with inventory management features in their enterprise resource planning (ERP) systems have a competitive advantage. 

The role of ERP in inventory management is to instantly communicate information amongst various departments in real-time inside the company, and it is its key competitive advantage. Yet, picking the ideal solution for your company might be challenging. Spending money on software systems that will satisfy your present and future needs is crucial.

Looking for ERP Software? Check out SoftwareSuggest’s list of the best ERP Software solutions.

 Let’s delve into an in-depth study before helping you choose the best investment.

What is ERP Inventory Management?

Enterprise Resource Planning (ERP) inventory management enables companies to handle all facets of their operations, including finance, planning, logistics, and inventory, on a unified platform. Hence, ERP inventory management tool is a streamlined approach to managing business.

Definition of ERP Inventory Management

The entire organization receives real-time inventory information from an ERP system for inventory control.

 It is a crucial capacity for companies that want to grow, have intricate supply chains or processes, want high levels of automation, sell various items, or simply maximize their inventory investments.

What are the Features of an ERP Inventory Management System?

The features of ERP system inventory management are created to simplify business operations. An ERP inventory management system’s assistance with order quantity calculations is one of its core capabilities.

With an ERP inventory system, you can automatically integrate the inventory with all facets of your business, from planning to operations, production, and accounting. Your company will become more regulated, streamlined, and effective by handling all operations through a single system.

Let’s look at some crucial features of ERP inventory management software.

Features of an ERP Inventory Management System

  1. Customer Relationship Management (CRM)

    To include customer data in decision-making and reporting processes, many ERP systems interconnect with CRMs. To build a prospect-reachable database, ERPs organize information such as contact details, prospect stage, model number, and order records.

    The marketing and sales teams can then focus on leads likely to convert, streamline lead times, and develop stronger campaigns.

  2. Automation

    ERPs automate time-consuming, repetitive business operations to save time and decrease errors. It works because the information users enter into an ERP system inventory management is accessible to the entire organization. And the data drives automated, efficient,  and extremely effective processes.

    The best automation results in significant time and financial savings.

    However, remember the development of automation rules in an ERP system requires the assistance of a system administrator.

  3. Supply Chain Management (SCM)

    Supply chain management is a crucial feature of ERP systems. Supply chain management (SCM) manages the movement of items, data, and finances associated with a product or service, from acquiring raw materials to delivering the product at its intended location. ERPs gather information about the supply chain to recommend optimal transfer and purchase orders.

  4. Centralized System

    Two of an ERP’s main functions are eliminating redundant data silos and integrating operations across departments. ERPs gather information from several departments inside a company to create a comprehensive picture of functional, economic, commercial, and customer details.

  5. Financial and Accounting Management

    Like normal accounting software, an ERP tracks financial information and monitors all business accounts, budgeting, and forecasting needs.

    Moreover, certain systems might provide capabilities like revenue recognition, multi-currency support, tax, and asset management.

    An ERP is made to assist organizations in budgeting, planning, and decision-making that is structured and efficient.

What are the Benefits of the ERP Inventory System?

ERP is quickly securing its position in organizations. Several operations not part of ERP initially are now integrated to enjoy larger benefits. The global ERP market is expected to grow at a CAGR of 11% from 2023 to 2030. 

Here’s how ERP inventory management is beneficial for your business:

Benefits of the ERP Inventory System

  1. Inventory Optimization

    Inventory challenges are many-  a simple slip and things can take a bad turn.

    In a dynamic market, keeping old products in inventory is suggestable. This becomes more critical for fast-moving products. Simultaneously, a lack of surplus may lead to losses if there’s an increase in demand or the current stock goes bad.

    Owners can be reluctant to have a large surplus inventory because it binds capital, which can only be through sales.

    The benefit of ERP inventory management is you can optimize your e-commerce inventory by integrating ERP. The tool provides insights into the current stock and any future rise/fall in demand.

  2. Supply Chain Visibility

    A supply chain transparency involves multiple parties supplying goods and materials to the companies. Inventory details need to be regularly updated and shared to do this smoothly. Initially, companies had the authority to carry out this task, but failing to share updates or incorrect updates led to the wrong supply, disturbing the entire supply chain.

    ERP integration in production planning can avoid such inconveniences. The entire production gets integrated with easy-to-access tools and real-time and accurate details. You can share these details with any third party, including suppliers or logistics.

  3. Precise Financial Reports

    In most companies, inventory levels are a huge part of capital investment. Thus, inventory details are important while making financial reports and integral to other processes like revenue forecasting and tax returns.

    Inaccurate inventory details can lead to erroneous financial reports and later cause issues. Integrating ERP and inventory automatically allows every inventory detail to be updated and accounted for in the financial system.

    In fact, many ERP companies provide features that automatically create detailed reports. This results in inaccurate financial reports and other related financial activities.

  4. User-Friendly Interface

    Within an organization, different operations use different systems. Each department has its interface that employees need to learn to operate. But the ERP tool offers a simpler interface incorporating multiple operations. All you need to do is integrate ERP with inventory management to eliminate learning an extra interface.

  5. Cost Savings

    All the 5 benefits of integrating ERP and inventory boil down to one simple advantage -cost savings. With inventory optimization, strike a perfect balance between demand and supply to reduce the cost of expired products or lack of supply. Optimizing your inventory’s data can lead to fewer chances of error, translating into capital gains.

    Therefore, integrating ERP with your inventory can help you save money. Moreover, with far and wide benefits, integrating ERP and inventory management doesn’t require any special effort.

What are the Major Functions of ERP Inventory Management?

An efficient ERP inventory management solution can help keep your costs under control by seamlessly contributing to your supply chain.

Here’s a list of basic functions of the ERP Inventory Management Software:

Functions of ERP Inventory Management

  1. Simplified Inventory Management

    Simply put, getting inventory management software makes the entire process of managing your inventory a lot easier, time-saving, and cost-effective. You can automate your key business processes with ERP inventory management and make smarter decisions.

  2. Increased Productivity and Efficiency

    The tool helps automate your daily manual tasks to increase productivity and efficiency, leading to maximum business growth. You can save countless man-hours as the software can efficiently manage stock, print shipping labels, dispatch orders, and create and update listings from the same dashboard.

  3. Increase in Profitability

    Did you know 1/3 of businesses in the US often miss a shipment deadline because they have sold an item that was out of stock?

    ERP inventory management keeps detailed records of marketing and production of goods for increasing profitability and reaching the maximum return on investment.

    Automating key business operations with ERP paves the way to efficiently and accurately fulfill essential tasks, including updating listings across all selling channels, managing stock levels, and processing orders. This can automatically reduce expenses and increase profitability.

  4. Quality Management

    The ERP system helps identify, track, and avoid issues related to delayed shipments, broken packages, etc. Moreover, the analytics feature can also guide through factors impacting quality management.

  5. Forecasting and Planning

    ERP inventory management help recognize the possibility of opening multiple regional warehouses near key customers. This can help increase efficiency and enhance service levels, made visible through insights provided by inventory management.

  6. Serial-number Tracking

    Another essential feature of ERP software is its ability to track serial numbers seamlessly. The software can manage unlimited serial numbers from when the inventory is received to when it is issued. Additionally, the data gets recorded permanently into the system for future reference.

    ERP inventory management is necessary for owners looking to take their business to the next level to grow company profits.

Common Inventory Challenges that ERP Inventory System Can Solve

The absence of ERP inventory management can create problems for a business. Upgrading an Enterprise Resource Planning (ERP) system can solve the most common inventory challenges.

An ERP inventory system can help you dodge the following:

  1. Excess Inventory

    43% of small businesses in the US either don’t track inventory or do it with a manual system.

    When selling seasonal products, avoiding excess inventory like the plague is safe. Too much inventory can increase overhead and reduce liquidity. But if you forecast too conservatively, you may face inventory shortages.

    In fact, U.S. retailers actually have about $1.43 in inventory for every $1 of sales they make.

    With an ERP inventory system, you can easily analyze historical sales data and past seasonal trends, which can help bring realistic safety margins for your business.

  2. Inventory Shortages (Out-of-Stock)

    Inventory shortages are as costly as excess inventory.

    For instance, if your products have a high-profit margin within a competitive space, insufficient stock during the peak selling periods can hamper your business.

    ERP inventory software can set “par levels” (minimum inventory thresholds) for each product, which can be changed throughout the year.

    The software immediately sends an alert out for order more if a product’s inventory is below the set par level. ERP inventory management systems can automatically send out purchase requests when united with the right automation software.

  3. Dead Stock

    In the US, anywhere from 20-30% of inventory is either dead or obsolete.

    For the uninitiated, any expired, unused, unsold, or forgotten goods are called on-hand or dead stock. It is harmful to have dead stock because it wastes money on two major fronts.

    1. You cannot recover the original cost of goods sold
    2. The storage (warehousing) cost increases every day the product sits idle.Dead Stock

    An ERP inventory system can help keep track of all data regarding the product’s purchasing, manufacturing, expiry, and when they become insolvent. The system can also send alerts to notify when stocks become dead.

  4. Inventory Turnover

    Inventory turnover helps you understand when to reorder or remanufacture goods. Calculating your inventory takes a lot of time manually. 46% of SMBs don’t track inventory or implement a manual method. This process involves keeping track of the following:

    1. Count cycle
    2. Order cycle
    3. Delivery cycle

    Apart from being time-consuming, there’s a high chance of human error. If you can automate this process, your business can stay operational while ordering and maintaining goods. ERP consulting will be helpful to easily execute this process.

Top 5 ERP Inventory Management Software to Improve Inventory Management

If you are looking to reduce your inventory challenges using ERP software, we have gathered a list of top solutions that can be beneficial for your business:

1. Batchmaster ERP

Get process manufacturing ERP for the food, chemical, nutraceutical, and pharmaceutical industries with Batchmaster ERP.

Batchmaster ERP allows you to run the manufacturing application easily with Sage 100&300, Microsoft Dynamics, QuickBooks, GP, and SAP Business One financials.

You also have the option to upgrade to the end-to-end enterprise resource planning (ERP) solution, which further simplifies the supply chain, CRM, process manufacturing, financials, and more.

BatchMaster ERP

BatchMaster ERP

4.6 out of 5 stars

10 Reviews


  • Sales order management
  • Mobile warehousing
  • Formulation and costing
  • Production and quality
  • Reporting and traceability


  • Easy to use
  • Seamless integration
  • User-friendly interface
  • Excellent customer service


  • Clunky programming
  • Challenging to understand modules
  • Comparatively expensive


The BatchMaster Process Manufacturing Application pricing starts at $2,000 as a one-time payment per user. The company does not offer a free version or a free trial.

2. Horizon ERP

Horizon ERP is an off-the-shelf, ready-to-use off-product solution well-suited for small businesses. It can seamlessly handle medium-sized companies’ billing, accounting, and inventory management.

Horizon ERP is a complete solution for your business. Horizon ERP is a simple user interface that helps you achieve a faster learning curve.

It presents a robust platform for handling thousands of invoices every financial year. The software helps you track and maintain up to twenty-five thousand SKUs, customers, and ledgers simultaneously.

Horizon ERP

Horizon ERP

4.3 out of 5 stars

25 Reviews


  • Accounting integration
  • Bank reconciliation
  • Billing and invoice
  • Accounts payable
  • Warehouse management


  • Easy to use
  • User-friendly interface
  • Good customer service
  • Great workflow design


  • Technical issues
  • Cloud system not available
  • Slow at times


Horizon ERP is priced at $150.00 as a one-time payment. They do not have a free version yet, but it offers a free trial.

3. Oracle Netsuite

Oracle NetSuite can be used for enterprise resource planning (ERP). ERP inventory management software can help your business seamlessly manage inventory, track financials, host e-commerce stores, and maintain smooth customer relationship management (CRM) systems. You can simply apply this flexible platform to a range of business applications.

Oracle NetSuite ERP

Oracle NetSuite ERP

4.8 out of 5 stars

84 Reviews


  • Sales forecasting
  • Customer management
  • Purchasing management 
  • Inventory management
  • Time tracking


  • User-friendly dashboard
  • Easy accounting
  • Available customization options
  • Easy integration with other software systems


  • Expensive support
  • Clustered UI
  • Average reporting functionality


  • NetSuite will cost you around $999 monthly to license the core software. It has an additional per month per user cost of about $99.


Offered by Xmplar, CREST is an ERP inventory management system that helps organizations in the manufacturing and trading industry manage their business operations. You can deploy this solution either on-premise or in the cloud.

CREST ERP has inventory manufacturing, sales, finance, project management, procurement, and human capital management modules. You can automate the purchase approval, enjoy real-time inventory tracking, view project status, plan resources, and forecast budgets.

CREST ERP provides services on a monthly and annual subscription. Contact their customer support team via phone, email, or an online inquiry.



4.8 out of 5 stars

44 Reviews


  • Billing and invoicing
  • Customer database
  • Document management
  • Financial analysis
  • Supply chain management


  • Good customer support
  • Excellent user interface
  • Customizations available
  • Value for money


  • Certain lengthy processes
  • Limited features
  • Average manufacturing module


  • The vendor hasn’t disclosed price details. However, the company may offer a free trial version.

5. Acumatica

Acumatica Cloud ERP is a cloud and mobile technology inventory management ERP platform cut for mid-sized customers offering a real-time view across the business anytime, anywhere, on any device, with any browser.

The Acumatica suite includes multi-company accounting and financial management, distribution, manufacturing planning and control, time and expense, project accounting, construction, services, retail, eCommerce, and customer relationship management (CRM).



4.7 out of 5 stars

3 Reviews


  • Accounting integration
  • Accounts payable
  • Automated scheduling
  • Barcode/ticket scanning
  • Compliance tracking


  • Powerful integrations
  • Numerous customization options
  • Minimizes downtime
  • Versatile platform


  • Difficult to reach customer support
  • Confusing returning process for PO
  • Average user security


  • Acumatica usually bills you based on the number of resources your particular instance of the app consumes. The license fee is around $1,000 annually, billed annually. It is useful for a typical small business with a moderate number of simultaneous transactions.

Final Words

There is no correct or incorrect option when selecting an ERP inventory management software solution. Everything relies on your specific company objectives. What are your top priorities, and which software solution will give you the efficiency and adaptability you need to accomplish them?

An ERP inventory management system can be beneficial, but only if it provides all the required features to expand and scale. So, before deciding, thoroughly research the available ERP inventory systems.

Frequently Asked Questions


You can automate business processes with an ERP to manage your inventory.

With ERP integration into your inventory, you can make tracking your inventory throughout your company easier.

You can control your inventory through ERP in the following ways:

  1. Track stocks and management
  2. Stock transfers and storage management
  3. Payment gateway functionality

An ERP inventory management helps businesses reduce costs by automating repetitive tasks, making reporting and forecasting easier.

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