Business success relies on your ability to effectively manage inventory. One of the most important parts to inventory management is Stock Keeping Unit codes (Commonly known as SKU codes). Not to be confused with barcodes or manufacturer codes, SKU codes are unique identifiers which convey product information in its simplest form. SKU codes are particularly important to inventory management as it is a key part of digitising your stock and assists employees in finding particular products when needed.

Why are SKU Codes important?

  1.  Easy to search and lookup products

    One of the most beneficial reasons to have an SKU code for each product variation is that it is much easier to search for the product in your POS system if there are any issues during a sale (i.e. price dispute). Essentially this eliminates human errors and reduces the number of miscellaneous sales that occur.  SKU codes should be clearly written on the label in an easy to find place for employees and customers.
    When SKU codes are kept up to date they can also be extremely beneficial for stocktaking and inventory management as they can directly highlight which products and which variations are selling, out of stock and in transit; making it easier to order more products or improve your cash flow by reducing the stock on hand for slow-moving products.

  2. Speed up warehouse processes

    With the ability to easily find and manage products, you can speed up warehouse tasks that may be tedious or time-consuming. A Custom POS System allows you to find exactly where your products are located within your factory and store. It becomes easier to navigate and pick, pack and ship your products across the world. By implementing SKU codes it becomes an accelerated and easy process where you simply need to scan a barcode to view and print order details and shipping labels.

  3. Industry standards

    In some industries such as manufacturing, hardware, and electrical retail, it is standard to have localised SKU codes implemented. They are used in your factory, in your brick and mortar stores, online and in your supplier invoices. It is considered a necessity in the supply chain because of how easy it is to look up and convey necessary information; in some instances, it can even assist businesses in multi-channel selling.  Without SKU codes you could be missing out on lots of business both from suppliers and customers.

  4. Improves quality control

    By utilising SKU codes to convey information quickly, you can improve the quality of your sales process. They provide concise communication through carefully picked numbers and letters, eliminating human error. A SKU code can assist in finding misplaced orders, processing returns or even providing updates on product shipment. As a SKU code is easily searchable in your POS system you are able to provide better customer service and more timely updates on product delivery.

The Elements of a SKU code

SKU codes are unique identifiers that is made up of several elements to better convey information. One of the biggest benefits for businesses is you can create your own SKU code system. There are many ways you can write an SKU code, but one of the most effective ways to create an SKU code tends to be the Cascade method, where you define the product by the largest identifier, i.e. hammer, lawnmower and spade.

Your SKU codes can be alphanumeric or numerical code systems but most POS Systems limit the code to 10 characters. So it is essential to convey the most important information. A best practice if you choose to use a numerical code as a SKU code is that you do not start the code with a 0 as most inventory management systems won’t pick it up.

If we take a look at common SKU codes, they may look like:

  • 603050
  • BC5952
  • 15920351
  • SM01-1121

Another good practice when creating your SKU codes is to add alias codes for looking up products. This can be handy for when suppliers make old SKU codes obsolete.

The difference between a SKU code and Barcodes

One of the most confusing parts of SKU codes is that they are unique to your business and other codes associated with barcodes should not be used as SKU as it removes the benefit of information being conveyed quickly.

There are two codes a SKU code is often misinterpreted for: a UPC (universal product code) and an EAN (European article number).

  • A UPC is the original barcode. It is a 12 digit numeric code that can be scanned anywhere and from any direction and are used to provide information to distributors and sellers.
  • AN EAN (or IAN) is the most commonly used barcode in the world and is used to identify individual products.

Using the Acumen SKU Code Generator on your Acumen POS

At Acumen, our custom POS systems are equipped with a SKU Code Generator to assist businesses with inventory management and product identification. With our generator, you will be able to create and print unique identifiers for all of your products.

When creating the product labels, our system will assist you in considering label size, font and font size to ensure it is readable and economical for you to use on your products.  Once they are in place you will be able to look up your SKU codes by using a barcode scanner or by product search making it even easier to ensure your employees are ringing up the right product. Acumen POS also comes with a style search that allows you to find the correct SKU code by variation.

If you are considering updating your POS System and would like a tailored built system that is supported and backed by industry leaders, get in touch with our team here.