Inventory management is a business function that includes the individual tasks relating to procurement, physical counting, valuation and removal of obsolete products. Business owners and managers often create a numbering system to enhance the management of each product in the company. This numbering system is often unique to the company because owners and managers will use a system that best works for the inventory which their company manages and sells.

Things You Will Need
  • Inventory

  • Accounting software

  • Computer

Separate inventory by type or style. This step can allow business owners and managers to use individual product lines as the base for setting up inventory numbers. Additionally, product specifics like color, size or other identifying factors may integrate into the numbering system.

Use sequential or unique numbers for inventory items. Owners and managers can either number inventory arbitrarily in a sequential manner or create a standardized, unique numbering system so employees can identify products by the item number when looking at a standard report.

Integrate descriptions along with item numbers. Companies should use specific product descriptions that accurately describe the product in the inventory management system. The description will often print on reports, which increases the need for accurate labels.

Allow for flexibility in the numbering system. Most companies will add or subtract inventory from their system on a frequent basis. Using a strict numbering system can quickly become confusing and may require additional changes to the numbering system.


Using a computerized inventory software program can help companies manage their inventory efficiently. Owners and managers can set up an automatic numbering system that will apply inventory numbers automatically.


Companies should avoid using a vendor’s inventory number because a change in this number can render their internal numbering system obsolete or ineffective.