A spreadsheet is simply a tool for calculating mathematical equations. From those equations, certain information can be gathered and the information can be manipulated into any form that the user so chooses. A spreadsheet can add 2+2, it can multiply, divide or subtract. It can do anything that it is “programmed” to do. There’s the magic word: programmed. A good spreadsheet will do what the user wants it to as long as the user understands how the spreadsheet works and how to enter data into it that he can manipulate via spreadsheet programs that are usually built right into the spreadsheet itself. An Inventory Spreadsheet is one that specializes in listing merchandise or items and manipulating them mathematically in order to come up with data that can be used to manage those items productively. Let us explore some uses of the Inventory Spreadsheet in this article. We are going to keep it simple because, if used correctly, spreadsheets are simple tools. One must just understand how they work in order to use them effectively.

Let us suppose that a small business manager has a desire to keep tabs on how many “widgets” he has in his store to sell to his customers. He wants to know how many, what different types are available, what colors are available, when each is sold, how many of each is sold, how many are left after the purchase of each one and how many are left. That is all this particular manager needs to know. So, he simply enters the name of each widget, its color, its type, when sold, etc. each time that a transaction involving widgets takes place. The spreadsheet has been programmed to take a total number and simply subtract a specific widget from the inventory every time one is sold. What can the manager glean from the information that the simple process of subtraction tells him? He can tell how many, what time of day, which part of the store, town or state and how many widgets remain. This information can help him control his inventory effectively so that he is aware of everything concerning widgets. He can then make all kinds of decisions based on this information.

Let us say that Bob of “Bob’s Widgets” has 1000 widgets in his store. He has 300 red ones, 300 blue ones, 300 yellow ones and 100 green ones. Bob is new in the widget business and doesn’t know exactly how many widgets of each color that he’ll need so he starts with the aforementioned balance. Bob has an inventory spreadsheet and has entered all the information about the widgets into it. The first week, Bob sells 15 red widgets, 9 blue widgets, 20 yellow widgets and 60 green widgets. Though Bob hasn’t been keeping a daily running tab, he looks at his spreadsheet at the end of his first week and by looking at his data determines that he purchased way too few green widgets, so he knows he must put in an order to purchase more of the green ones because they are selling the fastest. He also knows how many of each color is left for next week. This is a simple but effective example of how an inventory spreadsheet can assist in making management decisions.

Of the many various computer programs available to the merchant, the inventory spreadsheet program is probably one of the most valuable. Its consistent manipulation of figures via daily adjustments can give any manager a significant advantage in inventory decisions. The tool is invaluable in modern merchandising and sales of inventoried products. No business that deals in sales of merchandise should be caught without this tool.