Become a stock psychic: 3 tips for predicting and controlling inventory to maximise sales and savings

Balancing stock is one of the hardest things a small business can do well.

Order too much and you tie up capital in products that may never sell, leaving you with discounting or waste. Order too little and you risk missed sales, disappointed customers and a diminished reputation. So how do you predict and control inventory in a way that protects cash flow while still meeting demand? 

The cost of stock inefficiencies

The biggest issue that SMEs face is an imbalance in stock. Over-ordering drives up storage costs and can lead to wastage, while under-ordering creates shortages that frustrate customers and weaken trust in your business. 

Compounding the problem, many businesses still rely on disparate systems like spreadsheets for stock, separate tools for purchasing, and isolated forecasts for sales. This creates blind spots and makes it easy for errors to creep in.

Three ways to predict and control stock more effectively

Getting stock right is about having the right systems and practices in place. While every small business is different, the biggest gains come from focusing on three areas.

1. Invest in accurate, real-time data 

While many businesses still rely on gut feel, the truth is that effective stock control depends on shifting to hard data. Without accurate records, businesses are left guessing when to reorder and how much to hold.

This is where an ERP like SAP Business One brings all data together. Instead of juggling multiple spreadsheets or systems, you have a single source of truth for purchasing, sales, inventory and forecasts. With this visibility, businesses can act with confidence and respond quickly to changes in demand. 

2. Make forecasting smarter with ERP and AI  

Forecasting is critical to getting stock right. History is a good lesson, but it won’t tell you what to order tomorrow. The only thing that you can do to get a handle on tomorrow is to invest in hard data. You could easily drop your forecasting errors by half by using an ERP system, which means fewer shortages, less excess stock and more reliable cash flow.

The key is to understand the factors that shape demand and make sure they are reflected in your planning:

• Predicting seasonality – the amount of stock needed in January may look very different to March, so blanket rules rarely work
• High-value items – expensive products need closer management than everyday consumables, as the impact on working capital is much greater
• Marketing campaigns – demand can spike quickly when promotions or campaigns land, so forecasts should adjust accordingly

SAP Business One provides the tools to support this. The Material Requirements Planning (MRP) wizard helps businesses forecast demand and generate suggested order quantities. At the same time, minimum and maximum stock fields make it easy to set thresholds for each product and adjust them month by month to reflect seasonality and business cycles. Together, these functions turn forecasting from guesswork into a structured process.

AI takes this one step further. Its power to improve the stock holdings of a small business is extraordinary. By analysing sales, purchasing and inventory data, AI can model different stocking scenarios, highlight risks and point to opportunities. You might not have the mathematical skills, but there are now tools available that will do it for you, for free. 

3. Audit stock and supplier performance regularly 

Small mistakes add up. You might record 10 items dispatched but actually ship 11, or lose products in the warehouse only to find them weeks later. Even the best system can go awry without regular audits. They allow you to assess the current process to find areas for improvement and reduce errors.

Reviews of supplier performance are just as important. Late deliveries or missed orders can cause businesses to reorder unnecessarily, increasing costs and tying up working capital. Regular audits – both internal and external – keep predictive systems accurate and reliable.

ERP features that support better stock control 

SAP Business One provides a range of functions that help businesses move from reactive to predictive inventory management by:

• Creating automated alerts and triggers that warn you when stock levels, purchasing activity or other conditions fall outside set parameters
• Defining planning horizons and order settings (how often to order, minimum order quantities, economic order quantities) to keep replenishment consistent and cost-effective
• Saving multiple forecasts (for example, best case and worst case) and applying them per month or period to plan around seasonality and marketing campaigns
• Exporting data into familiar tools like Excel or SAP Crystal Reports to run “what if” scenarios and test different stocking strategies
• Tracking stock ageing, manufactured dates and expiry dates to reduce waste and manage products with limited shelf life

These features give managers the visibility and control they need to make decisions based on evidence, not guesswork.

The ROI of getting stock right

When businesses move from reactive to predictive inventory management, the benefits are significant. In our experience, forecasting errors can be halved, stock holdings reduced by 10-20%, and working capital released back into the business. Service levels also improve as customers enjoy the reliability of timely fulfilment and steady availability.

When all your data sits in one place, the real benefit is agility – being able to respond quickly to what the data shows. If demand is rising, you can secure inventory ahead of the curve. If it’s slowing, you can hold back on replenishment and protect cash flow.

By investing in accurate data, applying forecasting and AI, and maintaining regular audits, businesses can take control of their inventory instead of reacting to problems. With the right ERP in place, predictive stock management becomes achievable – and both sales and savings follow.

Want to see how SAP Business One could help your business manage stock more effectively? Talk to KBS today.