Behind any successful commerce business is an effective inventory management strategy. For finance teams, that means having the right tools and workflows in place to streamline inventory cycles and continually optimise. In this article, we give a refresher on how inventory cycles work, why they’re such a big deal, and how strategic solutions like Juni Capital for invoices help you maintain optimal stock levels, improve cash flow and strengthen supplier relationships.
An inventory cycle refers to the process a business undergoes from purchasing stock to selling products and replenishing inventory. This cycle includes several stages: ordering, receiving, storing, selling and restocking. It’s essential to keep this cycle running smoothly, so you can ensure products are available to meet customer demand without overstocking or understocking.
Too much stock means you’ve got excessive capital tied up in inventory, as well as higher storage costs. Understocking, on the other hand, leads to missed sales, dissatisfied customers and potential drops in cash flow. To avoid risks like these, it’s important to take a holistic approach to optimising all stages of your inventory cycle.
There are several strategies you can use to keep your inventory cycle on track. Here are some of the most popular and effective approaches:
Accurate forecasting helps you predict demand and plan inventory purchases accordingly. This is especially important if your business sells seasonal products where demand fluctuates significantly. By leveraging historical sales data, market trends and predictive analytics, you can anticipate future demand more accurately and adjust your inventory levels. Learn all about inventory forecasting for seasonal ecommerce businesses in our recent article on the subject.
Techniques such as just-in-time (JIT), economic order quantity (EOQ) and ABC analysis can also help your business optimise its inventory levels.
Just-in-time (JIT): With this approach, you minimise holding costs and reduce waste by ordering inventory only when it is needed. While JIT can significantly improve efficiency, it requires a highly responsive supply chain and accurate demand forecasting to avoid stockouts.
Economic order quantity (EOQ): EOQ is a formula that you can use to determine the optimal order quantity to minimise total inventory costs, including ordering and holding costs. This method helps you balance the trade-off between order frequency and inventory carrying costs.
To calculate your EOQ, use this simple formula: EOQ=(√2DS)/H
Where:
ABC analysis: ABC analysis classifies inventory items into three categories: A (high-value items with low sales frequency), B (moderate-value items with moderate sales frequency) and C (low-value items with high sales frequency). By categorising your inventory in this way, you can focus management and resources on the items that matter most to your business.
If you’re a finance professional working in commerce, you probably have first-hand experience with some of the challenges related to managing inventory cycles. Here are a few common factors you may run into:
To avoid understocking and overstocking, it’s essential to have a clear view of your inventory needs. That requires accurate data and analysis, which may not always be readily available – especially if you’re working for a business with a large product range or complex supply chains.
To maintain accuracy and real-time visibility over your inventory, it’s helpful to use reliable inventory management software. Recently, we did a deep dive into the 7 best inventory management tools for ecommerce retailers to help you find the best solution for your business.
Seasonal demand fluctuations make inventory planning much more difficult. If you’re working in a seasonal market, your business will need to stock up before peak seasons and manage excess inventory during off-peak times. Managing these fluctuations requires precise forecasting and flexible inventory strategies.
The outlay of spend before selling inventory ties up working capital, which disrupts your business’s cash flow and limits its growth opportunities. This is especially challenging if you’re working for a business with long cash conversion cycles (in other words, a long period of time passes between the moment you pay for stock from your suppliers and the moment you sell that stock and receive payment from your customers).
Unless your business’s cash flow is in good shape, it’s hard to maintain good relationships with suppliers, which also has an impact on your inventory management and costs. With a healthy cashflow, you’re in a much better position to negotiate more favourable terms, pricing and payment conditions with suppliers. Suppliers may offer discounts for early payments, but if your cash flow is poor, you might be unable to take advantage of these opportunities.
While inventory management software can help overcome the challenge of poor accuracy and visibility, it takes cash flow management to overcome the other issues described above. That’s where financing solutions like Juni Capital come into play, offering a wide range of advantages, including:
Juni Capital provides flexible financing options designed specifically to help commerce businesses manage their cash flow effectively. Businesses in the EEA can finance their inventory invoices on terms of up to 120 days with fixed fees. This means that the money you spend on inventory can be quickly reinvested into your business without waiting for stock to sell. That level of financial flexibility creates many advantages and growth opportunities for businesses looking to scale rapidly or manage seasonal demand fluctuations.
Flexible invoice financing from Juni Capital also helps you bridge liquidity gaps, so your business has more cash on hand to maintain smooth operations. This enables you to invest more in growth opportunities, take advantage of bulk purchasing discounts and improve overall profit margins. With access to immediate funds, your business can avoid cash flow bottlenecks and manage inventory investments more strategically.
Juni Capital offers customised financing solutions that you can adapt specifically to your business’s inventory management challenges. Our prices are fully transparent and predictable, so you can accurately forecast costs and make informed decisions.
Access to flexible financing also helps you negotiate better terms with your suppliers. With adequate cash on hand, you can leverage early payment discounts and build stronger, more reliable supplier relationships. By paying suppliers on time, you can also ensure priority during high-demand periods, which helps you avoid inventory issues during critical peak season periods.
Juni Capital’s cash flow management platform offers automated accounts payable features that help you streamline financial management processes. That means you have more time to focus on strategic initiatives instead of repetitive administrative tasks. At the same time, you enhance efficiency and reduce the risk of errors.
To give you a better idea of how Juni Capital helps businesses handle inventory-related challenges, let’s look at a success story from Boxbollen, a fast-growing playtech startup. The company operates in a very seasonal market, which means they face liquidity challenges due to significant demand fluctuations throughout the financial year.
By leveraging Juni Capital, they are now able to finance key expenses like ad spending during peak seasons without straining their cash flow. This allows them to meet customer demand promptly and maximise their sales potential. Thanks to Juni Capital, Boxbollen also has more financial flexibility to negotiate better terms with their suppliers, so they can take advantage of early payment discounts and strengthen their chain.
No matter which markets your commerce business operates in, efficient inventory cycle management is always a key factor for success. Juni Invoice credit offers a comprehensive solution to address common inventory management challenges, providing financial flexibility, improving cash flow and strengthening supplier relationships. By leveraging our flexible, transparent financing options, you are better positioned to optimise your inventory cycles, meet customer demand and keep ahead of your competitors. As a result, you’re better equipped to keep growing your business and ensure long-term success.
Ready to turn your inventory cycle management into a strategic driver for growth? Contact Juni to learn more and get started today.
Juni is not a bank – yet. We’re a financial technology company providing e-money services and as such are not part of a deposit guarantee scheme. Learn more about our license and how we keep your business and money safe.
Juni Technology AB (company number 559248-0908) is licensed and registered as an electronic money institution with the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) (license no: 64025). Payment Card Solutions (UK) Limited (company number 05941947) and UAB B4B Payments Europe (company number 305539054) are regulated by the Financial Conduct Authority (ref: 930619) and the Bank of Lithuania (licence no: 76), respectively. The Juni Mastercard Corporate Card is issued by Payment Card Solutions (UK) Limited and UAB B4B Payments Europe pursuant to a license by Mastercard International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. Juni Technology AB. Masthamnsgatan 21, 413 28 Göteborg, Sweden. © 2025 Juni. All Rights Reserved.
