Inventory Management Software Requirements: The Ultimate 2025 Checklist

Picking the wrong inventory management software is expensive.

You’ll burn budget, frustrate your team, and stall adoption. Picking the right one comes down to starting with clear, custom requirements.

This guide gives you a checklist you can tailor to your business, plus a framework to avoid wasted spend and poor fit.

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Inventory Management Software Requirements Checklist

Defining requirements is tough. Budget, features, and future growth all pull in different directions. Miss something, and you’ll pay for it later.

Start with the fundamentals—functions, integrations, and user needs—before layering in compliance or industry extras.

This checklist is built to be customizable, and you'll find instructions on how to fine-tune it to your needs further in the article:

Core functional requirements

• Inventory tracking. Look for real-time tracking of inventory levels across warehouses, stores, and dropshipping providers. This prevents overstocking, stockouts, and errors that creep in through manual data entry.
• Order management. A strong inventory software automates order processing, sales orders, and purchase orders—reducing errors, optimizing order fulfillment, and speeding up replenishment.
• Supplier management. Centralize vendor management, procurement, and supplier relationships to strengthen your supply chain. Smarter vendor data also shortens lead times and protects margins.
• Demand forecasting. Use sales data and historical trends for inventory planning. With accurate forecasting, you optimize stock levels, avoid shortages, and keep profitability intact.
• Integration capabilities. The system should connect with ERP, POS, ecommerce platforms, and accounting software. APIs ensure seamless workflows across business processes and support scalability.
• Barcode scanning and RFID. Enable mobile devices to scan SKUs or raw materials on the floor. Real-time inventory updates improve accuracy, speed up counts, and streamline warehouse management.
• Reporting and dashboards. Clear dashboards and KPIs turn raw inventory data into actionable insights for better decision-making—helping you see profitability impacts, not just stock counts.
• User permissions. Role-based access ensures sensitive data stays secure, whether it’s tied to pricing, vendor contracts, or procurement processes.
• Inventory valuation. Make sure the system supports FIFO, LIFO, or EOQ methods. The right valuation model directly impacts cash flow and profitability.

Technical & integration requirements

• Cloud-based access. Choose a cloud-based or hybrid inventory management system for flexibility, or go on-premises if your business needs full control of system requirements.
• API availability. Look for open APIs that connect your inventory software with ecommerce platforms, warehouse management systems, or accounting software—keeping workflows streamlined and scalable.
• ERP integration. Make sure the system links to your ERP for a single source of truth across business processes and supply chain management.
• Ecommerce compatibility. Direct integration with ecommerce platforms keeps inventory data in sync with customer demand and order processing.
• Mobile support. Ensure iOS and Android mobile devices can access real-time inventory for cycle counts, stock transfers, and warehouse management.
• Automated data backup. Prevent lost records and inventory data discrepancies with automated backup and recovery options.
• Customizable dashboards. Configure dashboards and KPIs to monitor stock levels, cash flow, order fulfillment, and profitability in real time.

Security and compliance requirements

• Data security. Encryption, access controls, and audit trails protect inventory data and prevent unauthorized changes.
• User access controls. Customizable permissions manage who can view or edit sensitive information like pricing, procurement, and vendor contracts.
• Audit trails. Detailed records of system activity help track changes, reduce risk, and support accountability.
• GDPR compliance. If operating in the EU, ensure the system meets GDPR standards to safeguard customer data and avoid penalties.
• ISO 27001 certification. Select inventory management software that aligns with ISO 27001 information security best practices.
• Two-factor authentication. Adds an extra layer of login security for users.
• Regular security updates. Confirm that the provider delivers ongoing patches to defend against emerging threats.
• Retention policies. Manage and archive inventory records in line with business needs and compliance requirements.
• HIPAA compliance. If you handle health-related inventory, ensure compliance with HIPAA regulations.

Vendor support and implementation requirements

• Onboarding assistance. Comprehensive setup support helps your team get up and running without delays.
• Training programs. Tutorials and training sessions improve adoption and inventory control practices.
• Support SLAs. Service-level agreements guarantee timely vendor response when issues arise.
• Upgrade processes. A clear upgrade path ensures you can access new functionalities and improvements without disrupting workflows.
• Dedicated account manager. A single point of contact helps resolve vendor management and procurement concerns quickly.
• 24/7 support availability. Around-the-clock support is essential if your operations extend beyond standard business hours.
• Implementation timeline. Align project timelines with business needs and seasonal inventory planning.
• Feedback mechanisms. Provide structured channels for feedback so your input informs future updates.
• Custom support options. Adapted services for unique business needs, such as raw materials tracking or perishable goods management.

User experience and change management

• Intuitive interface. A simple, user-friendly design makes inventory workflows easier for teams of any size.
• Accessibility options. Features that support diverse user needs ensure everyone can work effectively.
• Mobile access. Mobile-friendly inventory software allows staff to manage stock and update real-time data from anywhere.
• Training tools. In-depth resources help users understand functionalities and get the most out of the system.
• User feedback. Built-in channels let you collect insights to optimize workflows and improve decision-making.
• Change management strategies. Tools and support that ease the transition help teams adopt new processes smoothly.
• Customization options. Adapt the system for work-in-progress, finished goods, or warehouse management based on your business needs.
• User buy-in strategies. Features like gamification or incentives drive adoption and reduce resistance to change.
• Regular user updates. Vendors that deliver consistent updates keep your team engaged and informed about new features while reinforcing the benefits of inventory management software.

Industry-specific requirements

• Perishable goods management. Track shelf life, reduce waste, and align with safety stock rules.
• Batch and lot tracking. Essential for industries like food and pharmaceuticals where traceability matters.
• Multi-currency support. Manage transactions across international operations.
• Regulatory compliance. Ensure alignment with FDA and other industry-specific regulations.
• Seasonal inventory planning. Match inventory planning to seasonal demand to avoid overstocking or shortages.
• Language support. Multi-language capabilities make it easier to manage a diverse workforce or global supply chain.
• Custom reporting. Tailor reports to your industry’s KPIs and operational needs.
• Eco-friendly practices. Support sustainability goals with tools to reduce waste and optimize replenishment.
• Retail-specific features. POS integrations, SKU-level data, and barcode scanning streamline order management and customer demand tracking.
• Just-in-time (JIT). Cut holding costs by implementing lean replenishment strategies supported by robust inventory management software features.

Why a Custom Requirements Checklist Is Critical

Using a generic checklist is risky. You can end up with mismatched functionalities, unnecessary costs, or poor adoption across your team.

Tailoring your requirements makes sure the software fits your actual business needs, integrates with existing systems, and supports long-term profitability.

The checklist also acts as insurance. It forces you to define priorities, evaluate trade-offs, and make informed decisions when comparing providers.

If you skip this step, you risk overlooking the basics of how to choose inventory management software that aligns with your workflows and supply chain management processes.

Here are the common risks of not customizing your checklist:

• Unnecessary features. Paying for functions you don’t need wastes budget and complicates user experience.
• Lack of usability. Generic setups rarely align with existing workflows, which leads to low adoption.
• Poor fit with existing systems. Without customization, the inventory system may not integrate with ERP, POS, or ecommerce platforms, creating silos.
• Compliance risks. Industry-specific regulations can be overlooked, leaving your business exposed.
• Missed cost savings. You may fail to identify opportunities to optimize replenishment or reduce inventory holding costs.

Steps To Customize Your Inventory Management Software Requirements Checklist

Here's how you can customize your Inventory Management Software requirements checklist to fit your unique business needs:

1. Define business goals and project scope. Clarify objectives and make sure they align with broader supply chain and profitability targets.
2. Gather input from stakeholders. Include finance, operations, IT, procurement, and customer-facing teams to cover blind spots.
3. Tier and prioritize requirements. Separate must-haves, nice-to-haves, and future-state needs. Focus on core areas like order management, inventory control, and dashboards.
4. Assess integration, scalability, and security. Confirm the system works with ERP, POS, ecommerce platforms, and APIs, and that it can grow with your business.
5. Calculate total cost of ownership and ROI. Weigh licensing, training, support, downtime, and upgrades—not just an inventory management software's upfront pricing. This ensures profitability gains offset system requirements.

Key Stakeholders in Inventory Management Software Selection

Selecting an inventory management system is never just an IT project.

It affects finance, operations, procurement, and even customer service. Bringing in multiple stakeholders early ensures the software meets both strategic goals and day-to-day operational realities.

Cross-functional input also reduces blind spots.

The finance team will stress pricing and ROI, while operations focuses on workflows and real-time data needs.

IT cares about integration capabilities and system requirements, and customer-facing teams highlight the link between inventory accuracy and customer satisfaction. Involving everyone leads to informed decisions and smoother adoption.

Don't Check Out Without a Checklist

The right inventory management software is about fit.

A tailored checklist keeps you from overstocking on promises or stockouts of critical functionalities. Nail down your requirements, involve the right people, and you’ll make a purchase that streamlines workflows and pays dividends in profitability.

If you're in the process of researching inventory management software, connect with a SoftwareSelect advisor for free recommendations.

You fill out a form and have a quick chat where they get into the specifics of your needs. Then you'll get a shortlist of software to review. They'll even support you through the entire buying process, including price negotiations.

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