Inventory management in Excel: when is separate software the better choice?

Download the free Excel template for inventory management

For anyone who wants to set up an overview of items and stock levels without incurring fixed software costs straight away, we provide an editable worksheet. You can download our Excel template for inventory management (.xlsx) right away. This file helps you map the current stock of items and contains the following fixed columns:

• SKU (item code): The unique identification code of the product.
• Description: The name and product specification of the item.
• Opening stock: The number of units in stock at the start of the measurement period.
• Received: The number of items received from purchase shipments or production.
• Issued: The number of items delivered to customers.
• Reserved: Quantities already ordered by customers but still waiting in the warehouse to be shipped.
• Minimum stock: The safety level you want to keep in house at a minimum to prevent lost sales.
• Physical stock: Calculated by formula as Beginvoorraad + Ingekomen - Uitgegaan.
• Available stock: Calculated by formula as Fysieke voorraad - Gereserveerd.
• Reorder signal: A formula that warns as soon as available stock falls to or below the minimum stock level.

This template gives an instant overview, but has specific administrative limits you need to take into account:

• The worksheet shows one summary status line per SKU. There is no built-in change log to see afterwards who changed a number on which date.
• Stock levels are updated manually; there is no automatic link with webshops, marketplaces or POS systems.
• The file does not support a breakdown across multiple warehouse locations, aisles or shelves.
• Quality checks, serial numbers and best-before dates are not tracked separately in this basic set-up.

If you are looking for official examples from Microsoft itself, you can look at the overview page for Microsoft Excel inventory templates. This worksheet supports a simple stock list. Look into inventory software if you also want to connect orders, receipts and stock movements.

Two practical scenarios: where a basic template hits its limits

To make the difference between a spreadsheet and software clear, we analyse two recognisable fictitious situations from trading practice.

Scenario 1: A webshop with multiple sales channels

In this fictitious scenario, a webshop sells home accessories via its own webshop and an external online platform. Both channels draw on the same physical stock of 25 units of a popular table lamp. In a spreadsheet, the owner updates the stock manually once a day.

During a promotional weekend, 16 lamps are ordered via the own webshop and 12 units via the external platform. Because the spreadsheet does not communicate continuously with the sales channels, both platforms still show the full stock of 25 units. Only on Monday morning does it turn out that 28 lamps have been sold while only 25 are in the warehouse. As a result, three orders have to be cancelled or back-ordered, leading to delays and dissatisfied customers. In a demonstration, show how a sale on one channel affects availability on the other. Check the delay, reservations and what happens if the integration fails. A software integration does not guarantee that overselling becomes impossible.

Scenario 2: A technical wholesaler with purchasing and returns

In a second fictitious situation, a supplier of fastening materials manages 500 different SKUs. Suppliers regularly deliver in partial shipments and customers occasionally return items that first need to be checked for damage.

In our basic template, an employee has to add incoming items to the 'Received' column themselves. If an employee forgets to record a partial delivery or immediately counts a damaged return towards sellable stock, administrative stock discrepancies arise. Agree a receiving and returns check, even if you still work with Excel. Software can support that check, but does not replace the physical inspection.

Selection criteria: basic template versus inventory software

The table below summarises the functional differences. Use this table as a checklist for functionality you can ask providers about during a software test or demonstration.

When is a spreadsheet enough and when do you switch?

Moving from a spreadsheet to dedicated software is not a matter of company size alone, but of process complexity.

When our template is perfectly adequate

Do you sell a manageable number of items through one fixed sales channel, and does one person manage the stock movements? Then our basic template gives you enough overview. You keep control of minimum stock levels without monthly software costs or complex implementation projects.

Signs that your administration needs software

There are clear indications that a spreadsheet no longer fits your daily operation:

• Multiple sales channels: Orders via webshops, sales channels and physical counters draw on the same stock and must be continuously aligned with each other.
• Insight into warehouse locations: Employees spend a lot of time searching for items in the warehouse because there is no location management per aisle or rack.
• Partial deliveries and purchase orders: Goods received must be compared immediately with open purchase orders in order to quickly deliver outstanding backorders.
• Traceability: You supply products that require batch numbers, serial numbers or best-before dates for warranty or legislation.

Exploring software options for stock administration

Various categories are available within the software offering, depending on how deeply inventory management reaches into your organisation:

Inventory management within accounting

For trading companies that mainly want to record the financial value and administrative purchase and sale of items without complex warehouse management, an accounting package with an inventory function may be enough. As stated on the official feature overview of e-Boekhouden.nl, the package has a stock administration. This updates stock levels based on invoices, which provides an overview for smaller wholesalers and retailers.

Integrated trade software and ERP

If you have to deal with multiple warehouse locations, advanced purchasing processes and counter sales, a broader trade package is more suitable. Software such as Cash offers modules for trade and inventory in which order flows, purchasing management and financial processing are directly linked. As a result, stock levels in the warehouse match the financial balance sheet items better.

For more options, see our overview of inventory management software to discover which systems match your order flows and warehouse layout.

Checking a count in the download

The fictitious lamp starts with 25 units. Ten come in and eighteen go out. The physical stock according to the worksheet is 17. Of these, twelve units are reserved, so five are available. With a minimum of eight, Order appears. Regularly check whether the calculated physical stock matches a real count; the formula cannot discover a missing movement by itself.

Look at e-Boekhouden.nl for an administrative stock function and Cash as trade software. Use the same order to show which step each package actually records.