An inventory system will help you to avoid running out of stock or buying too much (and soaking up valuable cash that you need for other running expenses). At its simplest level, 'keeping stock' can be done with a list of number and cost of all the items you've got in stock. On a regular basis, you check the list against what is still on your shelves, and work out how much to re-order.
Computers can automate this process to a large extent, especially if used in conjunction with coding systems - such as bar-coding. A bar-code is attached to each item of stock, and your point-of-sale software registers when that item is sold. That information is fed back to your inventory control system, which is able to track immediately how much stock you should have left. These systems can then also trigger re-order instructions without you having to manually check or generate an order.