How To Track Your Inventory From Purchase Order To The Checkout Counter

Track Your Inventory From Purchase Order To Checkout

From the time you receive a purchase order (PO) to the moment the product gets into a customer’s hands, the items you sell go through all kinds of supply chain stages. There’s the manufacturing facility, what you store in your stock room, what’s on the shelf in your shop, items in your receiving space — the list goes on.


Closely watching how your products move through your supply chain is essential for a well-run business. And sure, this process involves lots of steps, but none of them are difficult — with the right processes in place. Here, you’ll learn all the reasons to track product movement at every stage, as well as the best inventory tracking methods for monitoring the flow of goods through your business.

What You'll Learn In This Blog

Why You Need To Track Inventory From PO To Checkout

  • It makes inventory management easier. Tracking products gives you clear visibility into your stock levels and where items are located. It’s a systematic and organized approach to inventory management.
  • A good system enhances productivity. Efficient inventory tracking prevents delays related to inventory shortages. With mobile apps and barcode scanners, you also streamline labor-intensive manual inventory tasks. As a result, you redirect your team’s efforts to more strategic activities, boosting productivity all the while.
  • It helps you fulfill customer orders in a timely manner. When you know exactly where products are located and how much of each you have, you’ll get orders out the door faster. Data from inventory tracking also informs improvements in your fulfillment strategy, like setting min/max reorder levels and adjusting ordering by season.
  • Errors and issues are caught earlier. Proper monitoring identifies challenges in fulfillment before they can affect your business. For example, your accessories shop needs plenty of your best-selling gloves from November until February. Inventory tracking offers supply chain visibility that ensures you catch issues before customers leave empty-handed, without the items they thought would be in stock.
What Happens If You Don’t Track Product Movement Through The Supply Chain?

What Happens If You Don’t Track Product Movement Through The Supply Chain?


Without real-time insights into your inventory levels, you might fail to anticipate spikes in demand or delays in supply chain processes. That’s why inadequate inventory tracking results in stockouts — that dreaded “out of stock” sign on your website or your shelves. A stockout leads to a nosedive in customer satisfaction, harms your brand’s reputation, and costs you money.


For example, suppose your business sells $1,000 worth of peach-scented candles every day. If that product is out of stock for four days, you’ve missed out on $4,000 worth of sales. If strawberry and vanilla hot sellers are out of stock as well, you’re missing out on even more revenue.

Excess inventory

Just as having too few items in stock causes issues, so too can having an overabundance of items. When you don’t manage inventory properly, you might overestimate demand during a slower season. The longer an item stays on your shelves, the more it costs you. This is why experts advise striving for a higher (but not too high) inventory turnover ratio.


As products sit on your shelves for longer periods, they become more likely to expire, and buyers become more likely to lose interest. Excess inventory also occupies valuable retail space and ties up funds you could allocate to more profitable investments or business operations.

Power Up

Have excess inventory? Here are five ways to make a profit. Plus, strategies to put in place to reduce excess inventory.

Incorrectly recorded inventory levels

Without a clear understanding of your products’ positions in the order process, you risk facing discrepancies between your recorded and actual counts. This also increases the risk of overlooking items that have already sold and shipped, skewing your sellable inventory count. And when you can’t rely on your inventory count, all your sales channels take a hit. 


This is particularly true for e-commerce customers, who can’t see the products on the shelf like an in-store shopper. They trust that they can shop from a live listing. If you can’t fulfill that order, you lose that customer’s trust — and they may not try to buy from you again.

Poor order management

Problems arise when you don’t have tight control over your ordering processes. Knowing your min/max levels, seasonal fluctuations, and how much of your inventory sells in which place are just three factors that influence proper ordering — and proper fulfillment, too. 

Shrinkage and theft

Over time, undetected theft from both shoppers and employees leads to significant financial losses. Without detailed inventory tracking, and proper employee accountability, it can be challenging to identify missing products. 

Steps To Product Movement Tracking Setup

1. Build a purchase order

A purchase order (PO) is a contractual document that lists important details about the products you’re ordering from fulfillment providers. These include item descriptions, unit costs, total costs, delivery dates, and any applicable terms and conditions. A detailed purchase order serves as a useful point of reference during later steps of the tracking process. It also legally binds you to pay your vendor.


Ordering software organizes and accelerates the ordering process by automatically producing POs based on predefined reorder points, historical demand, and current stock levels. When integrated with inventory tracking software, ordering software increases the benefits of purchase order management, minimizes the risk of stockouts, and optimizes inventory levels.

2. Receive inventory

Verify that you received the correct items in the right quantities. Suppliers sometimes make mistakes, and you don’t want to pass discrepancies along to your inventory management system. Counting boxes, glancing at labels, and skimming over packing slips are some easy ways to flag missing or incorrect products.


The best stock management protocol is to review what you’ve received and compare it to your purchase order. Carefully inspect all boxes and containers to ensure their contents are accurate. This way, you can determine whether the inventory you receive is exactly what you ordered or if anything is missing.


Inventory management software flags anomalies in the shipments you receive. Many inventory control programs include barcode scanning and comprehensive reporting to ensure all items were received in the correct quantities. This type of software goes beyond tracking incoming inventory as well; it monitors stock levels, follows product movements, and manages reorder points across multiple locations. All these actions are directly tied to correct inventory levels, making inventory management software an essential tool for all of your business’s touchpoints. 

3. Track bundles, recipes, and manufacturing processes

Whether you sell gift baskets, mystery bags, or bake cakes, product bundles should be set up and tracked just like individual products.


For example, if you own a bakery, your product tracking starts before you put your stuffed pastries in their cases. Instead, the process starts with tracking the butter, sugar, eggs, and flour that go into making the treats. It continues with tracking any different pastries that you put into bundles or gift bags. When you track these individual items, you know exactly where each item is going, which makes for effective order management.

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4. Store your inventory

As inventory comes in, you’ll need an organized storage system to locate items well before they leave your store. This involves knowing the number of items both in storage and on your retail floor. For e-commerce businesses, the equivalent is knowing how many items are in inventory and how many have been purchased but need to be shipped.


If you keep your products in your own facility, manage your storage internally. However, if you store your inventory in a supplier warehouse, you’ll need to integrate your inventory management and tracking techniques with the supplier’s processes. This approach allows you to keep a close eye on your product counts at all points.

5. Check out

Whether a transaction occurs in a brick-and-mortar shop or online, you need to update your inventory for that product immediately. This is the purpose of integrating your inventory management platform with a point-of-sale (POS) system. The latter creates a record of the purchase that includes the quantity of items sold along with the purchase date. This ensures real-time accuracy since your POS system will promptly deduct the sold item from your inventory management system.

6. Order fulfillment

If you run an e-commerce business, there’s an additional step between completing a customer’s order and the customer receiving their item. You need to fulfill the order, which involves pulling, packing, and shipping items. 


This is relatively easy to manage if you fulfill orders yourself. It can be trickier if you outsource this via models such as dropshipping. In that case, in your warehouse management system, you should track where products are in the process and whether they’re still on the storage shelves. Alternatively, they may have been set aside for orders or already been packed into shipping boxes. In any case, record every step until the order officially ships.

7. Shipping

Following products through the shipping process involves using order tracking systems to monitor each item’s journey from the warehouse to the customer’s doorstep. This process typically begins with assigning unique tracking numbers or barcodes to individual items during the packing phase. These identifiers allow you to track the locations of products after they leave your business. Tracking numbers for shipping are supplied by the delivery service you use.


Shipping software simplifies this process by automating several parts of supply chain management, especially the order fulfillment and shipping stages. These programs allow you to efficiently process, pack, and ship inventory by printing labels and postage for you while keeping customers updated on their deliveries. This type of software also tracks products by monitoring their statuses during order fulfillment, shipment, and delivery.

8. Returns and exchanges

Suppose a customer wants to bring a set of dishes back to you for a refund or exchange. You need to ensure that the dishes go back into your inventory sooner than later. This way, your inventory count for the fine china set is updated and the set isn’t sitting on a shelf for a prolonged period. Assigning returned items a unique identifier integrated with your POS system allows you to easily re-add each one to your system, upholding inventory accuracy.

Why Is An Inventory Management Program Key To Product Movement?

Robust inventory management includes your processes for ordering, handling, monitoring, and selling your items, whether those items are raw materials like leather and zippers for making handbags or a box of 10 blank cards for your stationery shop. The process is quite complex, involving forecasting customer demand, minimizing inventory holding costs, and efficiently moving products off shelves to their final destination. Keeping track of it all manually opens up the real possibility of human error — errors that could affect your whole business and your customers. 

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Inventory Management Tools To Increase Visibility Into Product Movement

Cycle counting

Cycle counts involve regularly and systematically counting a subset of inventory items. Instead of a massive inventory count all at once, you conduct smaller, more frequent counts and compare those numbers to your inventory records. This way, you get continuous insights into inventory turnover and have the information to identify any discrepancies in your records. This information is also used in inventory forecasting as you plan how many of each item to bring in.

Min/max PAR levels

Minimum and maximum periodic automatic replenishment (PAR) levels offer a real-time view of product movement by informing you of which products need replenishing and when. By setting these minimum thresholds within inventory management systems, you know when to reorder products based on drops in inventory. Maximum thresholds, on the other hand, dictate the highest number of any item you should keep in stock to prevent over-ordering.

Power Up

In this article, learn about min/max reorder levels and how they’re used to optimize your order management process.

Custom alerts

Custom alerts are text or email notifications that you can create and set for products. For example, you can receive alerts when a product is low in stock or completely out of stock. These alerts significantly increase your ability to track product movement since they provide timely information on critical inventory events.

Syncing sales channels

Syncing sales channels is essential if your business operates in multiple avenues. You’ll integrate data from your various sales channels into a centralized system, giving you a unified view of your sales and inventory across different touchpoints. This gives you full insight into how much inventory you need to reserve for which locations or sales channels. For customers, this means they will be able to trust your items are in stock, no matter where they go to buy them.

Stock forecasting

Stock forecasting

Stock forecasting uses historical data, market trends, and other factors to predict future product demand. You’ll assess which products are likely to move quickly and adjust their inventory accordingly. It’s how you know to stock more umbrellas in the spring and fewer earmuffs in the summer. Through this proactive approach, you get insights into expected product movement so you can make informed decisions to optimize your inventory management. 

Order fulfillment software

Order fulfillment software streamlines the process of getting products from inventory to your customers. These tools track every step, from picking items in the warehouse to packing and shipping them. With these tools, you can assess the efficiency of your order fulfillment process and see exactly how products are moving through it.

Benefitting From The Ins And Outs Of Product Tracking

An inventory management plan depends on effective product tracking. Accurate counts at each stage of the supply chain are key to managing and optimizing how you follow the valuable products that move in and out of your business. By implementing the above tracking methods alongside state-of-the-art software, you can make the most of your time and resources while meeting customer expectations. And when your customers are happier, you will be too.

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