{"id":76318,"date":"2026-06-02T15:45:55","date_gmt":"2026-06-02T13:45:55","guid":{"rendered":"https:\/\/www.sage.com\/en-za\/blog\/?p=76318"},"modified":"2026-06-03T12:45:05","modified_gmt":"2026-06-03T10:45:05","slug":"abc-analysis","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-za\/blog\/abc-analysis\/","title":{"rendered":"What is ABC analysis in inventory management? Definition, steps and examples"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--standard entry-header--has-illustration entry-header--has-illustration--standard\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-za\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is ABC analysis in inventory management? Definition, steps and examples\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\tKeen to make your inventory management more efficient? This guide explains ABC analysis, a vital technique for categorising inventory with the potential to impact cash flow, profitability, and overall business health.\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2026-06-02T15:45:55+02:00\">June 2, 2026<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is ABC analysis in inventory management? Definition, steps and examples\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-za\/blog\/abc-analysis\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-za\/blog\/author\/yassirmalik\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2024\/03\/Yassir-Malik.jpg\" class=\"entry-author__image\" alt=\"yassir-malik-profile-picture\" \/>\t\t\t\t<span class=\"entry-author__name\">Yassir Malik<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<section class=\"wp-block-sage-container is-constrained\"><div class=\"sage-container__inner\">\n<h3 class=\"wp-block-heading\" id=\"h-key-takeaways\">Key takeaways<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>ABC analysis helps prioritise inventory based on business value<\/strong> by categorising items into A (high value, low volume), B (moderate value), and C (low value, high volume), enabling more focused decision-making.<\/li>\n\n\n\n<li><strong>The method is built on a clear, data-driven process<\/strong>, including calculating annual consumption value, ranking items, and assigning categories to reflect their contribution to revenue and operations.<\/li>\n\n\n\n<li><strong>Applying tailored management strategies improves efficiency and cost control<\/strong>, with stricter oversight for high-value items and simpler processes for lower-value stock to optimise resources and reduce waste.<\/li>\n\n\n\n<li><strong>ABC analysis supports stronger financial performance and planning<\/strong>, helping businesses improve cash flow, forecasting, pricing decisions, and inventory turnover while aligning stock management with demand.<\/li>\n<\/ul>\n<\/div><\/section>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\">ABC analysis is an inventory management method that categorises items by their value to the business, helping you prioritise stock and allocate resources more effectively.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you&#8217;re new to product-based business, you&#8217;ll soon discover that managing inventory is an art form.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You&#8217;ll have to carefully balance how much space you dedicate to each item and how often you restock them.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Each item in your inventory has a slightly different role in your business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some products may be awkward and costly to handle, but essential in your catalogue because customers expect them.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Others might be your top sellers, driving the bulk of your revenue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding how to effectively manage your products and adjust their stock volumes to meet demand is the key to success. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How do you make sense of this complexity?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ABC analysis is a straightforward method that helps you categorise your stock so you can distribute your inventory management resources more efficiently.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this article, you&#8217;ll learn how to use this method to prioritise your inventory, and how this benefits your overall operation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a><\/a><strong>Here&#8217;s what we cover:<\/strong><\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-abc-analysis-in-inventory-management\" data-level=\"2\">What is ABC analysis in inventory management?<\/a><\/li><li><a href=\"#h-how-do-you-implement-abc-analysis-in-inventory-management\" data-level=\"2\">How do you implement ABC analysis in inventory management?<\/a><\/li><li><a href=\"#h-what-is-an-example-of-abc-analysis-in-inventory-management\" data-level=\"2\">What is an example of ABC analysis in inventory management?<\/a><\/li><li><a href=\"#h-what-are-the-benefits-of-abc-analysis\" data-level=\"2\">What are the benefits of ABC analysis ?<\/a><\/li><li><a href=\"#h-what-are-the-limitations-of-abc-analysis\" data-level=\"2\">What are the limitations of ABC analysis?<\/a><\/li><li><a href=\"#h-how-is-abc-analysis-used-in-different-industries\" data-level=\"2\">How is ABC analysis used in different industries?<\/a><\/li><li><a href=\"#h-what-are-best-practices-for-abc-analysis-in-inventory-management\" data-level=\"2\">What are best practices for ABC analysis in inventory management?<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><li><a href=\"#h-frequently-asked-questions-faqs\" data-level=\"2\">Frequently asked questions (FAQs)<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-abc-analysis-in-inventory-management\"><strong>What is ABC analysis in inventory management?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">ABC analysis is a way of prioritising stock so that the most important items get preferential treatment in your supply chain and sales operations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Just like the ABC categorisation of socioeconomic status, this methodology segments inventory into three levels of status, mirroring their value to your business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The definition of &#8220;value&#8221; may vary depending on your business niche or model. For example, it may reflect the articles&#8217; contribution to revenue or profit, or something more abstract, like brand positioning.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Broadly speaking, the three levels are:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-a-items\">A-items<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These are high-value products that contribute significantly to revenue but are sold in lower volumes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They require close monitoring and precise management due to their impact on the business.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-b-items\">B-items<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These have a moderate value and sales frequency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They are important to the business but do not require as stringent control as A-items.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-c-items\">C-items<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These are low-value items with high sales frequency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whilst they contribute less to overall revenue, they are essential for daily operations and should be managed efficiently to avoid overstocking.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Budget Speech: 2026\/2027<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download the guide to the 2026\/27 Budget to review key tax, payroll, and employment changes for South African businesses.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-a2a54612-83e6-4a6c-b6a6-d71baac631c1\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg\" class=\"single-cta__image\" alt=\"Smiling businessman using tablet\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-do-you-implement-abc-analysis-in-inventory-management\"><strong>How do you implement ABC analysis in inventory management?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">At its core, then, ABC analysis is about prioritising inventory.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, translating that into practical inventory management requires careful execution.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are several steps to follow if you want to use this method to best effect.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-1-gather-inventory-data-cost-demand-and-turnover\"><a><\/a><strong>Step 1: Gather inventory data (cost, demand, and turnover)<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The first step in the ABC classification is to outline the parameters for prioritisation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You&#8217;ll need to isolate data on the production cost per unit, the expected annual demand for each item, and the inventory turnover rate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ideally, you&#8217;ll have a system that maintains accurate historical sales data and staff capable of researching market conditions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This will help you anticipate potential changes.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-2-calculate-the-annual-consumption-value-of-each-item\"><a><\/a><strong>Step 2: Calculate the annual consumption value of each item<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You now need to work out how much each item contributes to your overall operation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This statistic is called the <strong>annual consumption value<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You translate the collected data into each item&#8217;s consumption value by multiplying the expected annual demand of each product by the production cost per unit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a simple formula, it looks like this:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>(Annual number of items sold) x (Cost per item) = (Annual consumption value per item)<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Annual number of items sold:<\/strong> The total quantity of a specific product sold in a year.<\/li>\n\n\n\n<li><strong>Cost per item: <\/strong>The price of one unit of the product.<\/li>\n\n\n\n<li><strong>Annual consumption value per item:<\/strong> The total monetary value of the product used or sold in a year.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In effect, this is a measure of the investment in each product against the potential for a return on that investment.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-3-rank-products-from-highest-to-lowest-value\"><a><\/a><strong>Step 3: Rank products from highest to lowest value<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Next, list all the items in a column, with the highest consumption value items at the top and the value of each product diminishing as you descend the column.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This ranking visually displays all items in terms of their importance for generating revenue.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-4-assign-them-to-a-b-or-c-categories\"><a><\/a><strong>Step 4: Assign them to A, B, or C categories<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Now choose arbitrary points in the list serving as the cut-off points for your A, B, and C categories.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whilst the exact thresholds can vary, a common approach is to add up all the consumption value figures and then see how much each item contributes to the total.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Often, it&#8217;s a select group of items that contribute most to the total\u2014an example of the Pareto Principle.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, the principle states that a small percentage of your effort (20%, say) generates most of your result (i.e. 80%).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s often applied to work, study and business, so here your most valuable products may be fewer in number but amount to a large proportion of sales revenue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your A, B and C categories could end up looking like this:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Group A: <\/strong>Items that account for 80% of the total consumption value. Again, let&#8217;s imagine it&#8217;s the top 20% of items.<\/li>\n\n\n\n<li><strong>Group B: <\/strong>Items accounting for 15% of consumption value. The next 30% of items, say.<\/li>\n\n\n\n<li><strong>Group C: <\/strong>Items accounting for 5% of consumption value. The remaining 50% of items.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-5-adjust-stock-levels-and-management-strategies-accordingly\"><a><\/a><strong>Step 5: Adjust stock levels and management strategies accordingly<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Finally, establish inventory management policies tailored to each category&#8217;s importance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, implement strict control and frequent reviews for A-items, moderate control for B-items and simpler controls for C-items.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-do-we-mean-by-strict-control\"><a><\/a><strong>What do we mean by strict control?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Focus on accurate demand forecasting for A-items to reduce stockouts and excess inventory.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You could use more reliable replenishment strategies, such as <a href=\"https:\/\/www.sage.com\/en-za\/blog\/what-is-just-in-time-inventory\/\"><strong>Just-in-Time inventory management<\/strong><\/a> (JIT). Or you could increase the frequency of inventory audits, perhaps weekly instead of monthly.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Behind the scenes, you could also dedicate more energy to monitoring key metrics for A-items such as sales trends, inventory turnover and profit margins, or analyse demand patterns more frequently.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You may also wish to invest more in security where you store your A-category items and monitor the performance of suppliers more closely.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, pay closer attention to on-time delivery, service quality and responsiveness of companies shipping these products.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consider investing in tools for setting and tracking these policies, such as <a href=\"https:\/\/www.sage.com\/en-za\/inventory-management\/\"><strong>inventory management software<\/strong><\/a>.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Budget Speech: 2026\/2027<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download the guide to the 2026\/27 Budget to review key tax, payroll, and employment changes for South African businesses.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-a2a54612-83e6-4a6c-b6a6-d71baac631c1\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg\" class=\"single-cta__image\" alt=\"Smiling businessman using tablet\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-an-example-of-abc-analysis-in-inventory-management\"><strong>What is an example of ABC analysis in inventory management?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">By systematically applying the outlined steps, you can achieve a clear, at-a-glance understanding of each product&#8217;s significance as shown in this example.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Item<\/strong><\/td><td><strong>Cost per item<\/strong><\/td><td><strong>Quantity sold per year<\/strong><\/td><td><strong>Consumption value<\/strong><\/td><td><strong>% of total consumption value<\/strong><\/td><\/tr><tr><td>Dresses<\/td><td>X<\/td><td>Y<\/td><td>XxY<\/td><td>50%<\/td><\/tr><tr><td>Jeans<\/td><td>&nbsp;<\/td><td>&nbsp;<\/td><td>&nbsp;<\/td><td>30%<\/td><\/tr><tr><td>Hats<\/td><td>&nbsp;<\/td><td>&nbsp;<\/td><td>&nbsp;<\/td><td>20%<\/td><\/tr><tr><td>&nbsp;<\/td><td>&nbsp;<\/td><td>&nbsp;<\/td><td><strong>(Total of consumption values)<\/strong><\/td><td>100%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">For this clothing retailer, dresses represent the largest component of total annual consumption value, and they are the obvious candidate to register as Category A items.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-the-benefits-of-abc-analysis\"><strong>What are the benefits of ABC analysis<\/strong>?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">ABC analysis is a very common and widely used technique in businesses of all sizes and across many industries.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The obvious advantage is that it is a simple yet effective way to prioritise resources.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is intuitive and adaptable, suitable for everything from raw materials and spare parts to work-in-progress goods and finished goods.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-operational-efficiency\">Operational efficiency<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">By identifying the most valuable items, you can concentrate efforts where they matter most, with targeted resource allocation for the best items.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is, making the best use of time, money, personnel, and technology for inventory management. This leads to improved overall efficiency.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-optimised-inventory-management-and-turnover\">Optimised inventory management and turnover<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">By categorising items based on importance you can tailor inventory management strategies, leading to more accurate demand forecasting, optimised inventory levels (especially for high-demand A-items), and improved <a href=\"https:\/\/www.sage.com\/en-za\/blog\/tag\/inventory-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory turnover<\/a>, a key indicator of financial health.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-cost-efficiency\">Cost efficiency<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Since you\u2019re managing high-value items more closely, you minimise the risk of overstocking or stockouts in that category.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This translates into a monetary return on the time you dedicated to the ABC methodology, and you avoid directing resources to obsolete items.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Drilling down, here are some areas where ABC analysis directly impacts your results on paper:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Accurate cost allocation:<\/strong> Your costs are now based on actual consumption and value, improving cost accounting and profitability analysis. This supports better pricing decisions.<\/li>\n\n\n\n<li><strong>Budgeting for stock purchases: <\/strong>By optimising inventory levels, you can more accurately plan stock purchases, preventing overspending and ensuring funds for critical inventory.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-storage-costs\">Storage costs<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A knock-on effect of the above is that you minimise excess inventory and use storage space efficiently.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This also saves on insurance costs, cutting your overhead expenses and improving cash flow.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-strategic-decision-making-and-forecasting\">Strategic decision-making and forecasting<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A clear understanding of inventory value distribution is a strong basis for informed decisions across various business functions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This includes purchasing, stocking, sales strategies, product portfolio management, supplier selection, and pricing strategies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The use of ABC analysis ensures your inventory levels are aligned with business objectives and demand.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-dynamic-pricing\">Dynamic pricing<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">ABC analysis can inform your <a href=\"https:\/\/www.sage.com\/en-za\/blog\/right-price-a-path-to-running-a-profitable-business\/\" target=\"_blank\" rel=\"noreferrer noopener\">pricing strategies<\/a> by identifying items that may warrant premium pricing or those with lower value where competitive pricing is crucial.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This can lead to increased profitability and improved competitiveness.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-relationship-with-suppliers\">Relationship with suppliers<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Tiered categorisation gives you a reason to foster stronger relationships with higher-tier suppliers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This could be done through prioritising communication, forming strategic partnerships, or simply giving them preferential treatment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This can rapidly translate into monetary benefits such as volume discounts or more flexible payment terms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Customer satisfaction:<\/strong> By making high-value items readily available, you are well-placed to meet customer demand promptly and consistently.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This enhances your brand reputation and fosters loyalty.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Budget Speech: 2026\/2027<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download the guide to the 2026\/27 Budget to review key tax, payroll, and employment changes for South African businesses.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-a2a54612-83e6-4a6c-b6a6-d71baac631c1\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg\" class=\"single-cta__image\" alt=\"Smiling businessman using tablet\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-the-limitations-of-abc-analysis\">What are the limitations of ABC analysis?<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-data-accuracy\">Data accuracy<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The effectiveness of this method relies heavily on accurate and up-to-date data.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Inaccurate data can lead to misclassification and suboptimal inventory management.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So pay attention to your records of item costs, demand, and other relevant factors, such as turnover.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-difficulty-scaling\">Difficulty scaling<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">ABC analysis can be complex and time-consuming if you\u2019re dealing with many SKUs\u2014the number can easily run into the 1000s for relatively small businesses, like a local hardware store.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This greatly impacts the effort required for data collection, analysis, and categorisation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Automated inventory management systems can help streamline this process and improve accuracy.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Dynamic market conditions:<\/strong> Market demand and customer preferences can change rapidly, affecting the relevance of your initial ABC categorisation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You may have to dedicate time to regular reviews and classification adjustments to maintain effectiveness and avoid misaligned inventory strategies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-overemphasis-on-cost\">Overemphasis on cost<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Focusing solely on consumption value (<strong>production cost x demand<\/strong>) may cause you to overlook other important factors, such as lead time, supplier reliability, or the strategic importance of certain items.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-subjective-categorisation\">Subjective categorisation<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Determining the thresholds for A, B, and C categories can involve some degree of subjectivity, potentially leading to inconsistencies and misclassifications.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Establishing clear criteria and guidelines for categorisation can help you sort your product portfolio consistently.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Hard to model for new products:<\/strong> Accurately classifying new products with limited historical data can be challenging.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You may need to engage in additional analysis and market research to forecast demand and estimate consumption value for such items.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-conflicts-with-traditional-costing-systems\">Conflicts with traditional costing systems<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Traditional costing systems may allocate overhead costs uniformly across all items, possibly over-costing C-items and under-costing A-items.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, if you run ABC analysis based on your existing cost accounting systems, you may have to make manual adjustments to ensure accurate cost allocation and profitability analysis.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-risk-of-dismissing-b-and-c-items-as-unimportant\">Risk of dismissing B- and C-items as unimportant<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Avoid the temptation to completely overlook B- and C-items, which nevertheless contribute to business success and customer satisfaction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Stockouts and missed sales opportunities in those categories will still do damage to your overall performance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So be prepared to implement appropriate, albeit less intensive, management strategies for B- and C-items to ensure balanced inventory control.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-is-abc-analysis-used-in-different-industries\"><strong>How is ABC analysis used in different industries?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">While the fundamental principles of ABC analysis are universal, the way you apply it and the criteria used for categorisation can vary across different industries.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is because each sector has its own priorities and challenges.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s see how some classic business sectors compare:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-retail\"><a><\/a><strong>Retail<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In retail, the main value criteria are sales revenue and profit margins. A-items are typically high-demand, high-profit products that drive many sales.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consider you&#8217;re a fashion retailer: your A-items might be trending apparel, whilst C-items could be basic accessories.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Seasonal variations and promotional campaigns heavily influence categorisation, so in this vertical, you&#8217;ll need to conduct frequent reviews.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-manufacturing\"><a><\/a><strong>Manufacturing<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">For manufacturers, ABC analysis focuses on the cost of raw materials, components, and finished goods.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your A-items might be expensive raw materials with long lead times or critical components essential for production.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here, the emphasis is on minimising stockouts of these items to prevent production delays.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Industries with complex supply chains, like automotive or aerospace, may prioritise supplier reliability and lead time as key factors in categorisation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-e-commerce\"><a><\/a><strong>E-commerce<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">E-commerce businesses often deal with a huge array of SKUs and fluctuating demand. ABC analysis here is driven by real-time sales data and customer analytics.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your A-items might be best-selling products with high conversion rates or items featured in marketing campaigns.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">E-commerce is often subject to rapidly changing trends and customer preferences, which means you need agile inventory management practices and frequent re-categorisation to keep on top of demand.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-electronics\"><a><\/a><strong>Electronics<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The electronics industry is characterised by rapid technological advancements and short product lifecycles. ABC analysis here must consider whether certain items in your range have become obsolete.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your A-items might be cutting-edge components or high-demand consumer electronics.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Budget Speech: 2026\/2027<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download the guide to the 2026\/27 Budget to review key tax, payroll, and employment changes for South African businesses.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-a2a54612-83e6-4a6c-b6a6-d71baac631c1\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg\" class=\"single-cta__image\" alt=\"Smiling businessman using tablet\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-best-practices-for-abc-analysis-in-inventory-management\">What are best practices for ABC analysis in inventory management?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Whilst ABC analysis is a straightforward concept and quite easy to implement, to fully leverage its benefits, you must be vigilant in aligning it with your specific needs and goals.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can go beyond the basic concept and create a comprehensive inventory management system with these additional tips:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-nbsp-nbsp-nbsp-nbsp-consider-value-judgements-other-than-roi\"><a><\/a><strong>1.&nbsp;&nbsp;&nbsp;&nbsp; <\/strong><strong>Consider value judgements other than ROI<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Assessing products purely for their revenue potential can sometimes provide an incomplete picture of their value and importance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The appropriate value judgement may vary according to your business priorities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, you may prefer to assess them in terms of Cost of Goods Sold (COGS), which can be a determining factor in each item&#8217;s profit margin; or directly in terms of profit margin, which is the result of revenue against COGS.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Other variables that could make more sense include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Unpredictable demand<\/strong> \u2014 taking more care over items that are equally prone to stockouts or excess inventory.<\/li>\n\n\n\n<li><strong>Operational importance<\/strong> \u2014 for example, supermarkets generally lose on bread production, but it&#8217;s an essential part of their operations from the customers&#8217; perspective.<\/li>\n\n\n\n<li><strong>Lead time<\/strong> \u2014 where suppliers take longer to replenish stock, you may have to maintain higher safety stock levels to avoid stockouts.<\/li>\n\n\n\n<li><strong>Product turnover rate<\/strong> \u2014 products that sell quickly generate revenue faster, but are more sensitive to customer demand.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-nbsp-nbsp-nbsp-nbsp-integrate-with-other-strategies\"><a><\/a><strong>2.&nbsp;&nbsp;&nbsp;&nbsp; <\/strong><strong>Integrate with other strategies<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Consider combining ABC analysis with other inventory management techniques, such as:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-just-in-time-jit-inventory-management\"><a href=\"https:\/\/www.sage.com\/en-za\/blog\/what-is-just-in-time-inventory\/\"><strong>Just-In-Time (JIT)<\/strong><\/a> <strong>inventory management<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Under <a href=\"https:\/\/www.sage.com\/en-za\/blog\/what-is-just-in-time-inventory\/\"><strong>Just-In-Time (JIT)<\/strong><\/a>, you receive goods only when they are needed for production or sale.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This method minimises inventory holding costs for A-items, reduces storage expenses, and further cuts obsolescence risk.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-economic-order-quantity-eoq\">Economic Order Quantity (EOQ)<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">This is a formula used to calculate the optimal quantity of inventory to order at a given time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Used in conjunction with ABC analysis, this technique determines optimal order quantities for each category of items, balancing ordering costs with holding costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This ensures cost-effective replenishment whilst minimising stockouts.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-demand-forecasting\">Demand forecasting<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Integration with demand-forecasting techniques improves the accuracy of predictions for each category.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This could impact your planning and resource allocation for A-items with high value and criticality.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-materials-requirements-planning-mrp\">Materials Requirements Planning (MRP)<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">If you are involved in manufacturing, you can combine ABC analysis with MRP systems to optimise production scheduling and inventory control.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This applies to raw materials, components, and finished goods.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-nbsp-nbsp-nbsp-nbsp-conduct-regular-reviews\"><a><\/a><strong>3.&nbsp;&nbsp;&nbsp;&nbsp; <\/strong><strong>Conduct regular reviews<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The value and importance of inventory items can change over time due to factors such as market trends, customer preferences, seasonality, or new product introductions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Regular reviews and updates help ensure that your ABC analyses are always accurate and relevant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ideal frequency of reviews will depend on the dynamics of your industry and business\u2014the bare minimum is at least quarterly or biannually.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Again, the accuracy of your reviews depends on the quality of your data on sales, costs and demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Involve relevant stakeholders, such as sales, marketing, and procurement teams, to ensure that your review process reflects the latest market conditions and business priorities.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-nbsp-nbsp-nbsp-nbsp-leverage-technology\"><a><\/a><strong>4.&nbsp;&nbsp;&nbsp;&nbsp; <\/strong><strong>Leverage technology<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Remember, we mentioned that automated inventory management systems help you rank and track thousands of SKUs?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Why leave technological solutions for extreme situations like that? Even the simplest ABC process can benefit from technology, speeding up data collection and analysis, for example.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here are some common tech solutions that lend themselves to this methodology:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-inventory-management-software\">Inventory management software<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">These systems can automate data collection, track key metrics, categorise items, and generate reports, saving time and reducing the risk of errors.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-data-analytics-tools\">Data analytics tools<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Use these to gain deeper insights into inventory trends, demand patterns, and cost drivers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This can inform your strategic decision-making and help you identify areas for improvement.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-spreadsheet-software\">Spreadsheet software<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">If your budget doesn&#8217;t stretch to a purpose-built solution and you&#8217;re a whizz with spreadsheets, this is a reasonable option.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But do you really want to spend your time inputting data and setting up calculation formulae?<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-barcode-and-rfid-technology\">Barcode and RFID technology<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">These systems greatly streamline data collection for ABC analysis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They reduce manual effort and improve inventory tracking accuracy, enabling consistent and reliable categorisation.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Budget Speech: 2026\/2027<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download the guide to the 2026\/27 Budget to review key tax, payroll, and employment changes for South African businesses.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-a2a54612-83e6-4a6c-b6a6-d71baac631c1\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg\" class=\"single-cta__image\" alt=\"Smiling businessman using tablet\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-41-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\"><a><\/a><strong>Final thoughts<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">ABC analysis helps you prioritise inventory based on value, improve stock control, and allocate resources more effectively. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Start by calculating consumption value and reviewing your categories regularly to keep your inventory aligned with demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By categorising inventory based on value and implementing tailored strategies, you can ensure that your most critical items receive the attention they deserve.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Use this method to improve stock control and resource allocation, ultimately reducing your costs and boosting cash flow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s a tool that shows how proper inventory management can directly impact your company\u2019s overall financial health.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-frequently-asked-questions-faqs\">Frequently asked questions (FAQs)<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1780407574248\"><strong class=\"schema-faq-question\">What is ABC analysis in inventory management?<\/strong> <p class=\"schema-faq-answer\"><br>ABC analysis categorises inventory by value, helping you prioritise stock and allocate resources more effectively.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780407591697\"><strong class=\"schema-faq-question\">How does ABC analysis improve inventory management?<\/strong> <p class=\"schema-faq-answer\"><br>ABC analysis improves inventory management by helping businesses focus their time and resources on the most important items. <br><br>This approach leads to more accurate demand forecasting, optimised stock levels, and improved inventory turnover, all of which contribute to operational efficiency.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780407614273\"><strong class=\"schema-faq-question\">What data is needed to carry out ABC analysis?<\/strong> <p class=\"schema-faq-answer\"><br>To perform ABC analysis, businesses need data on production cost per unit, expected demand, and inventory turnover. <br><br>This information is used to calculate each item\u2019s annual consumption value, which forms the basis for ranking and categorisation.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780407653134\"><strong class=\"schema-faq-question\">How often should you review ABC analysis?<\/strong> <p class=\"schema-faq-answer\"><br>You should review ABC analysis regularly to ensure it reflects current demand, pricing, and market conditions. <br><br>Regular reviews help you adjust your inventory strategy as product performance changes and keep your categories aligned with business priorities.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780482530410\"><strong class=\"schema-faq-question\">When should you use ABC analysis?<\/strong> <p class=\"schema-faq-answer\"><br>You should use ABC analysis when you need to prioritise inventory based on its value to the business. <br><br>It is particularly useful when you have a wide product range and need a clear way to decide which items require closer control, more frequent review, or greater investment of time and resources.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780482546961\"><strong class=\"schema-faq-question\">What are common mistakes when using ABC analysis?<\/strong> <p class=\"schema-faq-answer\"><br>A common mistake is relying on incomplete or outdated data, which can lead to incorrect categorisation and poor decision-making. <br><br>Another is focusing only on cost or sales value, without considering factors such as demand patterns, lead times, or operational importance. <br><br>It is also important not to overlook lower-value items, as they still play a role in meeting customer demand.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780482570906\"><strong class=\"schema-faq-question\">Can ABC analysis be used for small businesses?<\/strong> <p class=\"schema-faq-answer\"><br>Yes, ABC analysis is suitable for businesses of all sizes, including small and medium-sized enterprises. <br><br>It can help smaller businesses make better use of limited resources by identifying which products contribute most to revenue and should be prioritised in stock management.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780482633597\"><strong class=\"schema-faq-question\">Does ABC analysis work alongside other inventory methods?<\/strong> <p class=\"schema-faq-answer\"><br>ABC analysis works well alongside other <a href=\"https:\/\/www.sage.com\/en-za\/blog\/inventory-management-guide\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory management methods<\/a>. <br><br>For example, it can be used with demand forecasting or reorder planning techniques to refine how you manage different categories of stock and improve overall efficiency.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1780482644939\"><strong class=\"schema-faq-question\">Is ABC analysis suitable for all industries?<\/strong> <p class=\"schema-faq-answer\"><br>ABC analysis can be applied across many industries, including retail, manufacturing, and ecommerce. <br><br>While the underlying method remains the same, the way you define value and prioritise items may vary depending on your business model, customer demand, and operational requirements.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1779805943962\"><strong class=\"schema-faq-question\"><strong>What is the difference between EOQ and ABC analysis?<\/strong><\/strong> <p class=\"schema-faq-answer\"><br>Whilst both Economic Order Quantity (EOQ) and ABC analysis are inventory management tools, they serve different purposes.<br><br>ABC analysis categorises inventory based on its value and contribution to your business, helping you prioritise different items and allocate resources effectively.<br><br>EOQ, on the other hand, is a formula used to calculate the optimal order quantity for a specific item.<br><br>This means the ideal number you should order and hold in inventory without incurring unnecessary additional costs.<br><br>Essentially, ABC analysis tells you <em>which <\/em>items deserve the most attention, whilst EOQ helps you determine <em>how much<\/em> of each item to order.<br><br>Although the two concepts are different, they can be relevant to each other: you might use EOQ to calculate optimal order quantities and then use ABC analysis to apply stricter EOQ adherence to your A-items.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1779805979565\"><strong class=\"schema-faq-question\"><strong>How do you use ABC analysis for cycle counting?<\/strong><\/strong> <p class=\"schema-faq-answer\"><br>Cycle counting involves regularly counting a small subset of your inventory, rather than conducting a full physical inventory count.<br><br>It&#8217;s helpful because physical counts can be disruptive, and there is value in minimising how often you do them. <br><br>ABC analysis further enhances cycle counting by allowing you to focus your efforts on the most critical items.<br><br>For example, Items probably merit more frequent cycle counts, perhaps daily or weekly.<br>This ensures accuracy and minimises the risk of discrepancies.<br><br>Your low-value C-items can be cycle counted much less frequently, possibly left to the annual physical inventory counts alone.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice enewsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-84fe79b5-668d-41f8-a0cc-6229018c4ac9\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2022\/04\/GettyImages-1181404518-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2022\/04\/GettyImages-1181404518-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" 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https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/08\/Mar2025_Construction-Commerical_0777-768x512.jpeg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2025\/08\/Mar2025_Construction-Commerical_0777-1214x810.jpeg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\t<\/div>\n\n\t<div class=\"card-post__content\">\n\t\t\t\t\t<div class=\"card-post__label\">Recommended<\/div>\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-25T12:53:32+02:00\">June 25, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">12 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h3\">\n\t\t\t\t\t\t\t<a\n\t\t\t\t\tclass=\"card-post__title-link\"\n\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-za\/blog\/what-is-markup-percentage\/\"\n\t\t\t\t>\n\t\t\t\n\t\t\tMarkup calculator: how to calculate markup\n\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/p>\n\n\t\t\n\t\t\t\t\t<p class=\"card-post__description\">\n\t\t\t\tUse this markup calculator to work out a selling price, cost price, or markup percentage. You will also learn how markup works, how it differs from margin, and how to use it to set prices for your business.\t\t\t<\/p>\n\t\t\n\t\t\t<\/div>\n\n\t<\/article>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t\t\t\t<div class=\"row related-posts__non-featured\">\n\t\t\t\t<div class=\"col col-12\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--more h4\">More on this Topic<\/h2>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-1 post-76358 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-strategy-legal-operations tag-accountants tag-audit tag-bookkeeping tag-business-intelligence tag-profit-loss business_type-small-business business_type-medium-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-za\/blog\/accounts-payable-reports-guide\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-38-684x384.jpg\" class=\"card-post__image\" alt=\"Two businesswomen looking at report on tablet\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-38-684x384.jpg 684w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-38-768x585.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-38-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-04T12:39:10+02:00\">June 4, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">10 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tThe ultimate guide to accounts payable reports and reporting\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-2 post-76331 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-trends-insights tag-accountants tag-audit tag-bookkeeping tag-business-intelligence tag-business-management tag-profit-loss tag-staying-competitive tag-tax business_type-small-business business_type-medium-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-za\/blog\/accounts-payable-process\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-175138802_super-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-175138802_super-684x384.jpg 684w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-175138802_super-768x585.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-175138802_super-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-04T11:51:14+02:00\">June 4, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">8 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat is the accounts payable process? Steps, workflow and how to improve it\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-3 post-76286 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-trends-insights tag-accountants tag-bookkeeping tag-business-intelligence tag-data-analysis tag-financial-insights tag-making-financial-decisions tag-profit-loss tag-trending-topics business_type-small-business business_type-medium-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-za\/blog\/accounts-payable-reconciliation\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2021\/11\/HR-and-Payroll-image--684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2021\/11\/HR-and-Payroll-image--684x384.jpg 684w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2021\/11\/HR-and-Payroll-image--768x513.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2021\/11\/HR-and-Payroll-image--1213x810.jpg 1213w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-05-22T12:28:04+02:00\">May 22, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">9 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tThe ultimate guide to accounts payable reconciliation\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-4 post-76271 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-trends-insights tag-accountants tag-bookkeeping tag-business-intelligence tag-data-analysis tag-profit-loss tag-trending-topics business_type-small-business business_type-medium-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-za\/blog\/accrued-expenses-vs-accounts-payable\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2023\/07\/GettyImages-1252669747-2-684x384.jpg\" class=\"card-post__image\" alt=\"people in office\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2023\/07\/GettyImages-1252669747-2-684x384.jpg 684w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2023\/07\/GettyImages-1252669747-2-768x432.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2023\/07\/GettyImages-1252669747-2-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-05-22T11:35:30+02:00\">May 22, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">8 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tAccrued expenses vs accounts payable: Key differences\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Keen to make your inventory management more efficient? This guide explains ABC analysis, a vital technique for categorising inventory with the potential to impact cash flow, profitability, and overall business health.<\/p>\n","protected":false},"author":1774,"featured_media":68327,"menu_order":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[25,29],"tags":[294,312,313,193],"business_type":[2,3,5],"lilypad":[],"context":[],"industry":[],"persona":[12,13,16],"imagine_tag":[69,85,86,78,79],"coauthors":[401],"class_list":["post-76318","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","category-trends-insights","tag-accountants","tag-audit","tag-bookkeeping","tag-inventory-management","business_type-small-business","business_type-medium-business","business_type-accountants"],"sage_meta":{"region":"en-za","author_name":"Yassir Malik","featured_image":"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/resize-1675x1275-43.jpg","imagine_tags":{"69":"Inventory management","85":"Small business","86":"Start up business","78":"Supply Chain Management","79":"Supply management"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice South Africa","distributor_original_site_url":"https:\/\/www.sage.com\/en-za\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/76318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/users\/1774"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/comments?post=76318"}],"version-history":[{"count":5,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/76318\/revisions"}],"predecessor-version":[{"id":76351,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/76318\/revisions\/76351"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media\/68327"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media?parent=76318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/categories?post=76318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/tags?post=76318"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/business_type?post=76318"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/lilypad?post=76318"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/context?post=76318"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/industry?post=76318"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/persona?post=76318"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/imagine_tag?post=76318"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/coauthors?post=76318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}