An FMCG distribution company carrying more than 400 SKUs across three warehouses was, on paper, a growing success story — 30% year-on-year growth. Underneath that growth, inventory was being tracked in Excel, updated manually after each delivery, and reorders happened reactively: a warehouse called when something ran out.
Business Background
The spreadsheet-based system had scaled from a manageable few dozen SKUs in one location to over 400 across three warehouses, and the manual update process hadn't scaled with it. Stock counts were frequently stale by the time anyone looked at them. Purchase costs were never linked to sale prices in any system, so margin by product simply wasn't calculable — the business could see total revenue and total cost, but not which of its 400+ products were actually profitable and which were being sold at a loss. GST input tax credit was being missed on a meaningful share of purchases, because bill entry lagged behind goods receipt by enough days that some ITC claims fell outside the filing window.
Key Challenges
- 400+ SKUs tracked manually in Excel across three physically separate warehouses, with no real-time visibility
- Reorders happening reactively — 8 to 12 stockout incidents a month, discovered only when a warehouse called
- Purchase cost never linked to sale price in any system, making per-SKU margin impossible to calculate
- GST input tax credit missed on 15–20% of eligible purchases each month due to delayed bill entry
- Business growing 30% year-on-year with no visibility into which of its 400+ products were driving that growth profitably
Impact
Stockouts in distribution don't just cost the missed sale — they cost the customer relationship, since a retailer who can't get a SKU from you this week often sources it elsewhere going forward. Missed ITC is a direct cash cost, compounding monthly. And not knowing which SKUs were unprofitable meant the business was, in effect, subsidizing losing products with the margin from winning ones, with nobody able to see the split.
Requirements & Expectations
- Real-time stock visibility per warehouse and in aggregate, replacing the manually updated spreadsheet
- Automated reordering triggered by actual stock levels, not a phone call after the fact
- A direct link between purchase cost and sale price so margin per SKU became visible for the first time
- Purchase bill entry fast enough that no eligible ITC claim was ever missed
- A dashboard showing margin and slow-moving stock, refreshed automatically, not compiled manually each month
Strategic Approach
The spreadsheet's core failure wasn't the tool — it was that inventory and accounting had never been the same system, so cost and stock movement could never be connected automatically. We treated Zoho Inventory as the system of record for stock and connected it directly to Zoho Books for cost and margin, rather than building a better spreadsheet or a standalone inventory tool that would have recreated the same disconnection in a new form.
Comprehensive Solution
- Implemented Zoho Inventory with all 400+ SKUs migrated, categorised, and configured with a reorder point set per warehouse based on actual historical movement.
- Built the three-warehouse structure, so stock levels are visible per warehouse and in aggregate from one screen, replacing three separate manual counts.
- Configured reorder automation: when any SKU falls below its reorder point in any warehouse, a draft purchase order generates automatically to that SKU's preferred vendor.
- Connected Inventory to Zoho Books, so every goods receipt creates a bill and every delivery creates a COGS posting — making real-time margin per SKU available for the first time.
- Set up GSTR-2B reconciliation with a 3-day bill-entry standard, so every eligible input tax credit is claimed in full, every month, instead of falling outside the window.
- Built a margin and slow-moving stock dashboard in Zoho Analytics, refreshing daily from Books and Inventory data with no manual compilation step.
Measurable Results
Key Takeaway: "we track inventory in Excel" and "we have real-time inventory" are not different levels of the same thing — they're different categories. A spreadsheet can record what happened; it can't trigger a reorder or connect a purchase cost to a sale price automatically. That gap is exactly where the 40 loss-making SKUs and the missed ITC were hiding.
Client Impact
For warehouse teams
Reordering stopped being a phone call after the shelf was already empty — draft purchase orders now generate before stock actually runs out.
For the finance team
ITC capture went from a monthly leak to a non-issue, and margin reporting per SKU became a routine output rather than a project nobody had time to run.
For leadership
Could, for the first time, make a pricing or delisting decision on a specific SKU backed by its actual margin — not an aggregate number that hid 40 products losing money underneath the growth.
Conclusion
Growth hides margin problems until inventory and accounting are connected enough to show them. For a multi-warehouse distribution business, that connection is usually the highest-leverage fix available — well ahead of anything to do with sales or pricing strategy.
Still reordering by phone call and pricing without knowing per-SKU margin?
Tell us your SKU count and warehouse setup. We can usually tell you in one conversation what a connected Inventory + Books system would change.
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