How to Use Lightspeed Inventory Management Software in 7 Steps
This article is part of a larger series on POS Systems.
In this article, you’ll learn how to manage inventory using the Lightspeed POS system. It is browser-based, so you can create a free trial and start using the platform right away. We’ll cover how to add products, submit purchase orders (POs), receive and tag inventory, conduct inventory counts, and reconcile differences.
Lightspeed is our top-recommended POS inventory system, best for midsize businesses with multiple locations. It has age verification tools, payment processing, and analytics reporting. Sign up for its free trial.
Follow the steps below and download our Lightspeed mock inventory list to test the system for yourself. It’s formulated using Lightspeed’s product import file. Plus, view this quick video on the basics of Lightspeed inventory management to see the software in action.
Step 1: Log In to Your Lightspeed Account
Once you have an account set up, go to the Lightspeed website and enter your login credentials to get to your dashboard. From there, you’ll see a vertical navigation bar on the left. Select “Inventory.”
Step 2: Add Your Products
Before you can manage inventory with Lightspeed POS, you need to input your product information. This information includes everything from the product name, wholesale and retail price, and product description to vendor and manufacturer information, SKU numbers, and UPC.
There are four ways to add your products to Lightspeed:
- Import items from a database
- Import items from a vendor catalog
- Add products manually
- Add products and variants through matrices
We’ll go over each one below.
1. Importing Products From a Database
If you have a spreadsheet with your product information, Lightspeed can import everything for you. To do this, click first on “Inventory” and then “Import Items.”
In the upper right corner, you’ll see a green “+ New Import” button. Click that.
On the next screen, you can drag and drop or click to select your CSV or XLSX file. You can also choose whether this is an entirely new import, an update to existing items, or a combination of both.
If you don’t know how to format the spreadsheet, you can scroll down and download a template from Lightspeed.
Similarly, Lightspeed will import all your vendor and customer information. In the end, this means a quick move to a more effective POS system without losing important data. This is one of the reasons Lightspeed is one of the best POS inventory systems for small business retailers.
Don’t expect the product upload to be an instantaneous process. It will take Lightspeed some time to check your import file. We waited about 20 minutes for our file of 100 products to be ready to upload.
When Lightspeed is done checking your import file, it will send you an automated email.
From there, you can click on “Finish Import,” and it will bring you back to the Lightspeed software. Click “Import Items” and the products will be loaded into your POS inventory.
Although another loading screen will pop up, this part of the process was much faster—it took only a few seconds.
As we mentioned, it took about 20 minutes to upload 100 products. Keep in mind, it may take you much longer depending on how much formatting and adjustments need to be made to the spreadsheet before starting the upload process.
Also note that we did not upload any images or product photos, which would likely make the process longer.
2. Importing Products From Lightspeed’s Vendor Catalog
Lightspeed has an integrated supplier market with over 8 million preloaded items from more than 100 categories. It allows retailers to place wholesale orders and import products into their databases directly from Lightspeed POS. Using this method, it takes just a few minutes to assemble a PO and ensures accurate product data, as you’re importing it directly from the supplier.
To add products from these catalogs, navigate to “Vendor Catalogs” on the Inventory page. From there, select all of the categories that apply to your business and hit “Save Changes”
All of the vendors associated with those industries are now included in your vendor list.
You can add individual items from those vendors by submitting a PO. Go to “Inventory” > “New Order.”
Choose the vendor you want to add items from by selecting the company in the Vendor dropdown field in the PO. Then, hit “Save Changes.”
This will bring you to the PO, where you can add individual products from that supplier. If you want to add items from multiple vendors, you can select “Search All Catalogs.”
This will bring up a long list of products, and you can select which ones you want to add to your product list. This long list of products can be a little clunky to navigate, but you can filter your search by category and brand, which helps narrow the results down.
Once you find the items you want to add, you can add them to your product list individually by clicking “Import” on the left side of the listing, which will open up a product page, so you can add details.
Or you can select multiple items and hit “Import/Add Selected” at the bottom. These will add the products both to the PO and your product list.
3. Adding Products Manually
Lightspeed also allows you to input products and product information manually. When you begin with Lightspeed, this would be a time-consuming process unless you have a limited inventory list. However, adding products manually makes more sense post-setup, when you only need to add one or a few items.
To do this, click on “Inventory” and then “New Item.”
On the next screen, you’ll see a form with fields for various product information—pricing, SKU, vendor, category, etc.
4. Adding Product Matrices
Lastly, you can add products to a product matrix. This matrix allows you to quickly add products that have different colors or sizes all at once while also noting different inventory levels or prices as needed. This is also helpful for keeping all the variants of a product under one product listing instead of creating multiple listings for different sizes and colors.
To add product matrices, click “Matrix” from the main Inventory page.
This will bring you to the screen where you can add new matrices and manage your existing ones. From there, select “New Matrix.”
Now, you’ll enter your basic items details, including the description, brand, vendor, and pricing. On this screen, you’ll also select your matrix attributes.
Note that the matrix attributes are limited to color/size, size, color, and a custom three-attribute setting—which could be useful if you are selling a product that comes in multiple sizes, washes, and lengths (like pants). However, note that you cannot change the title of the attributes.
Once you select the variables you need for your product matrix, fields to enter the specific variants will appear according to what you select. You can add over 40 options for each variant.
When you have entered the different attributes you need, hit “Save Changes” on the top left of the screen. A matrix field will populate with all of the different possible attribute combinations, and you can adjust details like pricing and stock levels for each option.
Step 3: Create & Submit POs Manually or Automatically
Much of the difficulty and time in preparing a PO come from figuring how much of each product you need. With the right settings, Lightspeed can configure POs for you. By noting your inventory on hand and reducing your inventory count after each sale, you can set up specific rules in Lightspeed that will generate POs automatically.
Lightspeed POS will also combine POs for the same vendor so that everything is in one place and easy to track. All you have to do is review the PO and submit it to your vendor.
You can also select different rules for different stores. Let’s say you have two physical locations (Stadium Store and City Store) and an online store (nmbr1fan.com), and each store carries and orders their own inventory.
Team Pompoms might sell more quickly at one location than another. If that’s the case, you can set up a rule for each store. Stadium Store can automatically reorder 100 Team Pompoms when it reaches an on-hand inventory level of 25, but City Store can automatically generate a PO for 15 Team Pompoms when it reaches an on-hand inventory level of 5.
To set this up, go to Inventory and choose Item Search.
From here, select a product to see its details, pricing, and costs, as well as current stock in the upper right corner and the automatic reordering info in the center.
To implement automatic reorders, set a reorder point (the point at which your stock level will trigger a reorder) and a reorder level (the number of the product you want to automatically reorder). Remember, if you have more than one location ordering inventory, these levels can be different if the product sells at a different rate.
It’s important to note that automatic reorders aren’t automatically submitted to your vendors. They still require your approval—so you can always make changes.
Step 4: Receive Inventory With Lightspeed POS
Inventory shrink happens for many reasons, including administrative errors, vendor error, and fraud. Assuming you’re submitting accurate POs, delivery of the inventory is the first point to identify those costly errors.
It’s important to make sure you receive the correct products, quantity, price, and quality from your vendors. You can do these checks with your Lightspeed POS.
Tips For Receiving Inventory
- Review each invoice. Confirm PO, invoice, and shipment match.
- Immediately note any and all inconsistencies between PO, invoice, and shipment.
- Resolve any discrepancies with your suppliers before paying the invoice.
- Report discrepancies to your vendor within 24 hours to explain and correct the invoice.
- Update inventory counts before storing or stocking the inventory.
When you follow these tips, you’ll know exactly how much inventory is coming into your store and prevent paying for extra items or items you didn’t receive. For more tips like this, read our guide to inventory shrinkage.
When you receive a delivery, you can use Lightspeed mobile to check your items. You can also do it on the desktop by going to “Inventory” then selecting “Purchase Orders.”
From there, pull up the corresponding PO. This will show you everything you ordered from the vendor.
Next, select “Check In” in the upper left corner.
Now you can accept deliveries. Scan each item with a bar code reader or manually select it. If it’s a small order and you can account for everything quickly, you can select “Receive All Items” to make the process go more quickly.
After you’ve confirmed the delivery, select “Add Received to Inventory.” All items received will be added to that location’s inventory on-hand count. When you’re done, select “Purchase Order Finished.”
At this point, if you failed to check an inventory item, it will be displayed as Not Received or Partially Received in the PO.
While still in the PO, you can email a copy of the PO along with a note detailing the discrepancy to your vendor.
After you’ve received inventory and added it to your database, go back to Lightspeed’s Inventory and search for the item or items delivered. You’ll see updated total stock counts.
Step 5: Tag Inventory: Label Inventory & Stock the Shelves (optional)
Your inventory may come with its own barcodes. If that’s the case, you might just need to add a price tag with your logo on it, and the product is ready to sell.
However, if you’re selling your own or others’ craft products, your inventory likely won’t come with barcodes. You can create and print your own unique barcode stickers with Lightspeed. It recommends using a Zebra Label Printer, but others are compatible as well. We’ve put together a guide to the best barcode printers for your small retail business.
Tagging your inventory now will save you tons of time in the future. During customer checkouts, your associates just need to scan to get pricing info and automatically adjust inventory counts accordingly. You’ll also save time during physical inventory counts when all you have to do is scan an item with a Bluetooth barcode scanner.
Step 6: Conduct Physical Inventory Counts
The first advantage a modern POS system provides you is a current, accurate inventory count based on sales—so you already have a head start. The second advantage is speed.
Go to “Inventory” and then “Inventory Counts.”
From there, select the green “+ New Inventory Count” button in the upper right corner.
Name your inventory count. I recommend choosing a set schedule and naming convention so you can maintain consistency and easily find records later. To learn how to conduct cycle and annual inventory counts, read our guide to retail inventory management.
Now you can either scan bar codes or manually select products and mark the counts. If something comes up that demands your attention, the system will save, so you can go back to it later.
Using a barcode scanner is a lot faster than manually searching for products, so I highly recommend that option. Alternatively, you can print out count sheets to distribute to your team. This option is ideal if you need a manager to check the counts before they are entered, which can help prevent internal theft. This option also works well if you want to divide the counts by multiple team members, assigning certain employees to different product categories or departments.
The count sheets are automatically generated without the expected on-hand quantities, so it is automatically a blind count.
Step 7: Reconcile Differences
Once you’ve completed your physical inventory count, you’re ready to reconcile. In a perfect world, there would be no differences between what you physically counted and what your POS had listed as stock on hand. If there are, now’s the time to account for that and make sure your POs will replenish inventory levels to the correct amount.
If your physical count page is still up, great. If not, return to it by selecting “Inventory,” clicking “Inventory Counts,” and then opening the specific count you’re looking to reconcile. Assuming your physical count is complete, select “Reconcile.”
Reconciling your number will update your inventory number to reflect the number from your physical count. Now it’s time to review Shrinkage.
The reporting for Shrinkage will show the difference between what your POS thought you would have based on recorded deliveries and sales and your actual physical count. It will show you differences by product, both in number of units and total value.
At this point, your inventory counts are updated and you’re ready to return to submit new POs with your vendors accordingly.
Lightspeed POS and other modern POS systems can revolutionize the way your small business manages inventory. For many small businesses, inventory management is the one area where people are still using the same technology and methods used generations ago.
Upgrading to a new POS system with Lightspeed is quick and easy since the platform is intuitive and powerful. If your small business is moving any kind of product in volume, this is an easy way to save yourself time and money. It will pay you dividends day after day, quarter after quarter, year after year. Sign up for its free 14-day trial.
You May Also Like …
- Once you have the basics of inventory management, learn the best practices for retail inventory management
- See what else Lightspeed can do for you in our full review of Lightspeed Retail
- If you decide Lightspeed isn’t the best fit for you, see our other top-recommended POS systems for small businesses
- Learn more about POS systems and how they work