One of the biggest challenges that store owners face is keeping track of their physical inventory.
It’s a necessary evil that is a massive disruption and inconvenience for most business.
However, stock taking is something that you cannot avoid if you are serious about keeping your balance sheet and P&L statement up to date and accurate.
If you are struggling with physical inventory counting, then take a look below at these useful suggestions.
You cannot control your inventory if you do not know what you actually have on your shelves.
Physical inventory management requires you to keep track of your inventory on a consistent basis.
This means that you can provide your customers with the correct information when they ask if you have a particular item in stock.
Even if you use a perpetual inventory management system, you should still conduct a physical inventory account from time to time.
This will let you know if there has been any stock lost due to waste, theft or breakage.
The easiest way to do physical inventory counting is with a barcode reader.
Using a barcode reader is the most accurate method for physical inventory counting, but it means investing in bar code scanning technology and software.
For those who do not have the budget to do this, count cards or count sheets allow for manual tallying of the inventory on the shelves and in the warehouse, but they are more error-prone.
Some companies, especially those with large multi-department stores, or those that have smaller stores but limited staff resources, like to do partial counts.
This is known as cycle counting and is done on a regular basis instead of doing full inventory counts once or twice a year.
Instead of closing the store to total everything up, the managers will break the store into departments or categories, and do one category at a time.
High value or high volume sections will be looked at more often than less critical parts of the store.
The inventory counting can be done by department leaders or by employees.
However, if you are working with employees then you should take care to use trusted ones and to move them between departments so that theft issues can be caught.
Periodic full physical counting is important, and it is something that should be done to confirm that the cycle counts are correct.
Physical counting is likely to require store closures, but it is still worthwhile and it can be sped up if the store or warehouse is well-organised and the staff are well-trained.
You can make your inventory taking more efficient if you count all items at least once a quarter, and have two separate employees perform the counts.
From there, blind comparisons of the count can be done at the end of the day with any discrepancies being recounted.
It is a good idea to break your stock into groups A, B and C, which are then reviewed regularly.
Group A should cover 70 per cent of the value of your inventory, while group B would be the next 15 per cent, and group C the bottom 15 per cent.
Count the group A items most often, because loss or theft of those items is going to be the most disruptive to your business.
Ideally, you would use electronic systems to count the inventory that you hold and track not just stock levels but also errors.
If you notice that a particular type of product is broken, lost or stolen regularly then you can make changes to the store layout or handling procedures to reflect this.
Once you have a regular routine for physical inventory counting, you should find that it becomes a simple, efficient and highly beneficial part of running your business.
If you need help managing your inventory, then look no further than ASP Microcomputers.
We are here to help you with your stocktaking and inventory management challenges and are the market leader when it comes to the development of customised and packaged solutions.
This includes Inventory Management, Portable Barcode Readers, Supply Chain Management, Time and Attendance and Asset Tracking to name but a few.
Please call us today on 03 9578 7600 or 1800 061 642 or contact us through our website on https://www.asp.com.au/contact-us/.