Inventory is a great asset to any business as it is part of the capital invested. It requires proper management so as to make sure that it is available for sale when demanded by customers. Proper management of inventory enables businesses to have right quantity of goods according to the demand. If inventory is not well managed, businesses can be found having low level of inventory for sale which fails to satisfy customer demands or high level of products inventory which exceeds the demand which can lead into losses and increasing costs. For businesses in Tanzania, inventory management is still a challenge and has not been taken seriously as many traders use primitive methods of inventory management. Hence the problem here is poor management of inventory. Inventory is also sometimes referred as stock. One of the best practices of inventory management is by using an inventory management system. The system provides functionalities for managing the inventory and integrates the inventory with various business operations such as sales and orders. The system monitors inventory levels and movements but also performs other business operations according to the users’ needs. It is a tool for storage of both inventory information and other information about business operations. The study aimed to provide an assessment of the impacts of such systems on retail businesses in Arusha City. The assessment of the impacts was conducted by the evaluation of the impacts of inventory management systems on business revenues, assessment of the impacts of inventory management systems on business profits and determination of the effects of inventory management systems on the running costs of businesses. Results indicate positive impacts on both revenues and profits. These impacts are very helpful for businesses and help propel growth of revenues and profit generation. Regarding running cost, inventory management systems impacts an increase in running costs as implicated by a majority of respondents. Though after cost assessment, the increased running costs are seen as necessary for the achievements of business goals. The study recommends business to adapt the use of the system and obtain in depth knowledge of its operation for its full utilization. Also recommends vendors to keep on upgrading the systems by adding more functionality and provide versions which can run in various settings or infrastructure.