Many small businesses start inventory tracking in a spreadsheet because it feels simple and free. You list your SKUs, quantities, costs, maybe a tab for purchase orders, and it works for a while. Then the mistakes start to pile up. Items show as available when the shelf is empty. Two versions of the file get out of sync. You spend more time reconciling than selling.
How spreadsheets get used for inventory
Item master tab with SKU, description, unit, cost, and current quantity
Transactions tabs for receipts, shipments, adjustments
Formulas and lookups to roll movements into an on hand balance
Manual updates after each pick, receipt, or stock transfer
Spreadsheets can work at tiny scale. The trouble is that spreadsheets were not designed for concurrent warehouse activity or continuous inventory control. Research has long shown spreadsheets are error prone when used for operational record keeping, not just analysis.
Three common pitfalls of spreadsheet inventory
Human error and hidden formula mistakes
Typo in a quantity, a range left out of a SUM, a broken VLOOKUP. Decades of research find material error rates in operational spreadsheets, which is exactly why numbers drift without anyone noticing.No real time visibility
Inventory changes constantly. A spreadsheet is usually updated after the fact, which invites overselling and backorders when sales channels or warehouse staff act on stale numbers. Real time systems continuously update stock levels as events happen, which is not how spreadsheets behave.Single user bottlenecks and version chaos
Who owns the truth when two people have the file open or someone saved a copy to their desktop? Spreadsheets lack permissions, audit trails, and collision handling that multi user inventory systems provide by design. Industry guidance emphasizes inventory accuracy and auditability as core warehouse metrics, which are difficult to maintain inside ad hoc files.
A better alternative: an inventory tracking system
An inventory system is software built to track items, locations, and movements in real time. Here are the practical benefits.
Real time stock accuracy
Perpetual inventory updates quantities immediately at receipt, pick, return, or transfer. This reduces overselling and speeds replenishment decisions.Multi user support with permissions
Several people can receive, pick, and count at once while the system controls access, prevents collisions, and records who did what and when. These audit trails support investigations and continuous improvement against warehouse KPIs.Location control and movement tracking
Record bin to bin transfers by scanning from location, item, quantity, and to location. Your on-hand by location stays accurate without manual reconciliation.Barcode and mobile workflows
Scanning items and locations cuts manual entry and catches mispicks at the source, which is why modern systems pair mobile apps with barcode support. This is difficult to replicate reliably in a spreadsheet.
What the change looks like in practice
Stand up your item master in the new system and map any existing UPC or internal barcodes
Label locations and turn on scan verified receiving, picking, and transfers
Run perpetual counts by location or ABC class to continuously correct errors instead of waiting for an annual shutdown
Bottom line
Spreadsheets feel simple at the start. As order volume grows, they create blind spots, errors, and overhead. An inventory system gives you real time updates, multi user control, and an audit trail that supports the warehouse metrics professionals care about. That shift turns inventory from a guessing game into a reliable, repeatable process.
How EmissaryWMS Solves Your Spreadsheet Dilemma
EmissaryWMS will help you manage your inventory by allowing you to track by location, status, and whether it has been allocated to an order. You’ll also know who performed which action using our audit log. It integrates with most barcode scanners and also includes a mobile scanner, using your device’s camera as the input.