9 Common Inventory Mistakes That’ll Cost You and How to Best Avoid Them
9 Common Inventory Mistakes That’ll Cost You and How to Best Avoid Them

9 Common Inventory Mistakes That’ll Cost You and How to Best Avoid Them


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Arguably the most important area of your construction business is inventory. And not paying extra attention to your inventory management may result in major issues with your business. What you may not know is that inventory is a far more complicated area than it seems. If you’re the business owner or the project manager, you are expected to know the ins and outs of the business. You are also responsible for all the aspects of the project, particularly inventory management.

Around 60% of all your company expenses usually come from construction materials. This only means that if you’re successfully managing all of your construction materials, you can prevent out-of-controlled costs and eventual job delays. However, there are other areas where you can commit mistakes despite focusing on inventory management. In this blog, we’re about to discover some of the most common inventory mistakes that you may encounter and how to prevent them effectively.

1. Not conducting inventory process audit occasionally

Internal audits are no fun, yet they are completely essential. There are a lot of business owners who have no idea how unprofitable and unproductive their processes. In reality, regular audits are very important as these will help you and your employees stick to the processes you have set in place for a good reason. 

When you conduct an internal audit of your inventory, you will be presented with an excellent opportunity to figure out what is working and what isn’t working. This type of audit brings light to several weak spots for your business, such as having no idea on some wasted money and time.

If one of your crew does a weekly inventory, you must spend a couple of hours shadowing him. Give him the right to use web-based inventory software to do the job effortlessly. Doing so will help you learn many things about how your employee maneuver your inventory and how your business exactly runs in this area.


Another thing to remember – internal audits are preferably done every quarter.

2. Overstocking

Out-of-date inventory can cost your business every day as it sits in your stock room. Overstocking usually happens whenever the project manager avoided using other construction supplies, afraid of running out. Cases like this usually occurred and as much as possible, it should be lessened. If you have excess inventory, turn your dead stock into cash by simply liquidating it at fair discounted prices. 

You can also choose to return excess supplies and construction items to your supplier. However, you might need to pay a re-stocking fee. 

  • Invest in inventory management software that will give you real-time data on all inventory levels. Software solutions designed for inventory can help you automate re-ordering and enables you to track the performance of services and other stock items.
  • Track your inventory so that you have firsthand awareness when stock levels are high. Doing so can help you prevent unnecessary re-stocking of some construction items. Ensure to watch spending trends to precisely predict the right time to re-order again to your supplier.

3. Loss from inaccurate tracking

One of the most serious issues in any business is losing stock, whether the cause is simple inventory miscalculation or theft. Certainly, it can also happen to your business. Here are some tips you can do when facing such issues.

  • If you still have your inventory manually, you have to switch to online inventory software. It will improve overall accuracy by minimizing the potential of human error.
  • Take note of any construction items and supplies you cannot use due to breakage or another form of damage. This can be written off to recoup the overall costs.
  • Staying on top of your inventory allows you to quickly determine when anything is amiss, including the undesirable possibility of employee theft.

4. Over-reliance on one employee who basically “knows everything”

You always wanted to work with an all-star employee who gets the entire process and only requires minimal supervision. Helpful, energetic and intelligent – things that you most likely consider during the hiring process. Here’s the truth – it is unwise and unsustainable to allow and expect just one employee to be your sole keeper of all company’s information, most especially when it comes to inventory. 

Deploying modern inventory software can help you and your people. There’s no reason for you to burden your top employee with all responsibilities. Sure, they will always be a top-notch asset in your construction business. However, your ability to thrive and function must not depend on anyone.

5. Having a disorganized warehouse or stockroom

Inventory checks seem more frustrating and tedious than they need to be, mainly because of messy storage habits. On some occasions, employees or your crew just placing stocks in whatever areas they can be spotted. They’re not mindful of their actions and aren’t considering the right place for the items. This is particularly true with most businesses, including the construction business.

The labeling of shelving and all other storage solutions in the proper manner is crucial to keeping your warehouse or stockroom fully organized. Additionally, those who typically bring in the inventory have always to place the right items in its proper place to make sure the system continues to work. 

6. Insufficient training and communication

Some of your employees aren’t qualified enough to manage your inventory. The people you choose to handle the inventory system should deeply understand the system and its application. Hence, it only shows that anyone involved with inventory must have proper training even before starting to operate it to prevent future issues. 

Another important consideration is making assessments on how many people can use the system once deployed. Take note that there must be more than one employee who can handle the inventory. There are some instances when the person is charged for the day isn’t available. In such circumstances, you won’t have access to your inventory whenever there’s an emergency. 

If you already had the right people, make sure there’s constant communication between all of you. Communication is imperative here and not only for the ones who manage the inventory but also for all other trade teams. Make use of specialized software that has both inventory and tasks management features.  

If you’re new to this tech, request a live demo and  get your 30-day FREE trial!

7. Lacking an effective inventory strategy

When it comes to inventory, a bit of planning goes a long way. You may found yourself pulled in thousands of different directions, affecting your inventory management to fall. It’s because you approach this area of your business without a solid strategy. As a result of your lack of attention, handling inventory becomes more time-consuming. And doing it when the situation is desperate will make it even more worst.

Carve out generous time to develop a strategy for your inventory management protocol.

8. Not having a simple, clear process for employees to follow

You can have a great team and the best inventory system at once. However, without a visibly defined process, all your efforts to have everything organized will be wasted. This is why No. 7 should be taken into consideration. Whatever inventory strategy you develop, the process must be written out, posted, emailed, or printed out for all your employees to let them understand and follow. Speaking of posting, any updates and announcements can be easily posted using subcontractor scheduling software. Everyone on your team can exchange comments and updates each other using this powerful tool.

Make sure to clarify every detail as possible on what’s being expected of your employees, especially those responsible for removing and adding items to inventory. Once again, offer training sessions on-demand and never forget to provide refresher courses as well. After all, what’s the point in investing modern inventory system if only a handful of crews are going to follow it, right?

Below are some helpful pointers you could use in setting up and maintaining a defined and clear process:

  • Test out your new process with a few employees before starting.
  • Start with a new set of inventory-based instructions on your current workflow.
  • Roll out together with your entire team by phases and not all at once.
  • Apply inventory strategies to small tasks first. Take on complex tasks later.
  • Provide documentation at every step.
  • · Be flexible, patient and open-minded, especially when deviating from the original plan.

9. Not utilizing technology the correct way

It’s only normal to give everything you got when faced with a problem and find ways to solve it. However, when it comes to inventory, a lot of business owners like you become too eager to solve things. In the process of fixing such issues, making everything organized becomes complicated. As a result, the implementation becomes complicated as well. In terms of the inventory tools that can help your business stay organized, simplicity is the key element. Below are some areas you can oversee to simplify your inventory challenges:

  • Use the right software solution – always look for a simple (modern) inventory solution for your construction business.
  • Don’t get tied down by any expensive hardware – why bothered buying a dozen scanners when you can let everybody use a smartphone to check every inventory item.

Strive to find the best system for your construction business – one that saves you money without reducing your company’s resources.

Key Takeaways


All of the mistakes mentioned above are strongly connected. And you can correct any of them as you’re making a simple deal with your team. Because once you finally have a streamlined process and inventory solution, it will be easier for you to avoid financial losses and delays often caused by inventory issues and mistakes.

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