- May 15, 2022
- Posted by: simba001
- Category: Business Insights
Smooth and painless stocktakes don’t happen by accident. Details are planned well in advance and the products, materials, and tools you’ll be using are prepared beforehand. If you intend to do physical inventory counts anytime soon, be sure to follow the guidelines below. Doing so will make your life so much easier.
1. Taking a physical count of inventory? Consider cycle counting
Have you ever tried cycle counting (aka partial stock-takes)? It’s the process of partially counting merchandise on a continuous basis so you can monitor stock levels without interrupting store hours. Known as one of the most efficient inventory counting methods for retailers, cycle counting can be done daily or weekly (usually before the store opens) and can free you from having to do full inventory counts.
On the other hand, if cycle counting isn’t your cup of tea, or if you feel that you have to do a full inventory count in addition to partial stock takes (as some retailers do), the other tips in this post should make your life easier.
Cycle counting is the process of partially counting merchandise on a continuous basis so you can monitor stock levels without interrupting store hours.
2. Choose your “counters” wisely
Don’t assign your inventory counts to just any employee. The group conducting your stock counts should consist of seasoned employees as well as those who can provide fresh eyes.
You’ll need seasoned team members, as these employees would be more familiar with your policies and the location of different items. However, someone who’s so used to your store or stockroom may overlook small issues and details, so having people who are a bit new to the team may be beneficial.
Another option is to hire third-party inventory counters. This is helpful if you don’t have the in-house expertise or resources for conducting the count yourself. Now, the actual counting procedure will vary from one provider to the next. It’s best to consult with your third-party stock counter and follow their processes.
3. If you must do a full physical inventory count, schedule it ahead of time
The timing of your inventory counting process matters a great deal, so have a think about when (and what time) to schedule your counts, and then plan (way) ahead.
When is a physical inventory usually taken?
The question of when (and how often) you should conduct full physical inventory counts really depends on you. Some stores do it once a year, others conduct it on a bi-annual basis, while other stores do it more often.
It’s best to do physical inventory count on the last weekend of January or at the end of July because your inventory items are potentially at their lowest during these periods.
Whatever you decide, though, you’ll want to settle on a date well in advance (weeks or even months before) and make sure your employees know what’s coming up. At this stage, you need to take down the names of the people who’ll be helping you with your physical inventory count. Make sure they can make themselves available on the decided date.
Ideally, you wouldn’t want to halt store operations, so if you can manage it, schedule your inventory count after business hours. But if this isn’t possible, and you’ll need to close up shop for a day or several hours, be sure to give your customers a heads up.
Alert regulars that you’ll be closed on a certain date, verbally inform people when they’re in your shop, and display a sign outside your store or at the checkout counter detailing the date and times you’ll be closed and why..
4. Post-count: keep your inventory in check
Finished counting your stock? Take immediate steps to improve your inventory accuracy. Here’s how:
Double-check and audit your counts ASAP – It’s always a good idea to double-check your inventory numbers before updating your stock levels, to make sure everything was counted correctly. And the time to do this is right after you complete your inventory count. The information needs to be fresh in your mind, so avoid postponing your inventory checks and audits.
Pull up inventory reports – Doing so will enable you to analyze the data and see what you can do to improve your business.
This task should be straightforward if your POS or retail management system has reporting and retail analytics capabilities. Just generate the right reports and study the data for actionable insights. Pinpoint high-risk zones – Use your inventory reports to identify high-risk zones or regions in your stores. Tell your staff about these high-risk areas and figure out how you can minimize losses in those regions.
Compare multiple completed inventory count reports – Once you’ve completed multiple counts over a period of time, it’s beneficial to examine those reports so you can spot patterns. This will help you figure out why losses or discrepancies are taking place, so you can take preventive action for the future.
Comparing past reports with current ones will also help you see if your inventory practices are working. Are discrepancies decreasing over time or not? Whatever the case, the only to find out is to compare the data.
If you encounter discrepancies take immediate action to get to the root of the issues. As we mentioned in our post on inventory reconciliation, discrepancies can often be traced back to human error, bad math, or missing paperwork. In such cases, you’ll need to tighten up your processes. Document your procedures and automate various steps to minimize mistakes. For instance, if you’re manually entering products into your system, use a barcode scanner or CSV file instead.
Sometimes, inventory discrepancies are caused by more sinister reasons. You could be dealing with theft or fraud in your store, in which case you’ll have to investigate and take steps to prevent and stop the issues.
Whatever the case, the only way to determine what you’re dealing with is to conduct inventory counts regularly, so make it a point to stay on top of this task..