Doing a physical inventory count is something that many retailers avoid because the process is extensive, and it can be overwhelming at times. Conducting a full inventory count can require paying employees overtime or possibly shutting down the store for however long it takes to finish the inventor. While the process is stressful, taking inventory is important to get a clear record of the amount of stock currently in the store. Here are some tips and advice to help guide you through the process of doing a full physical inventory.
Physical Inventory Explained
When you take a physical count of inventory, you manually count all of the items in your store. The task is normally completed by an assigned employee. A separate count is done for the stock room and the sales floor. Due to the extensive and tedious nature of the task, a physical inventory count is normally only done once a year.
1.Using Cycle Counting
Many retailers are turning to cycle counting as an alternative method to help avoid exhaustive full inventory counts. The process involves taking a small section of the store and counting it. This method allows you to evaluate your inventory on a periodic basis and is a less demanding way to manage your inventory levels. Once you are finished, analyze the SKU number with what’s recorded in the POS system. This is an efficient way to measure your inventory and see if there is any shrinkage.
2.Utilizing Technology
Traditionally, inventory is measured using notes or a computer spreadsheet. There is always the possibility of human error. Due to recent technological advancements, there are innovative inventory counting features on the market that can reduce the amount of time that it takes to measure your inventory. A commonly utilized item is a barcode scanner, which can be used to count inventory in a timely manner, while also fixing any mistakes. Utilizing technology to complete a physical inventory can help save time and money.
3.Early Preparation
Due to the time-consuming aspect of counting inventory, it’s important to plan ahead. The best times to do a full inventory are right after the holidays are over or near the end of summer. Finding times when inventory is usually lower can help make the process a little easier. Regardless of when you decide to schedule an inventory count, you should notify everyone in advance about the inventory check. Try to perform the inventory check when your store is closed to avoid disruptions to normal business.
4.Choose Your Inventory Counters Wisely
A major part of accurate stock takes is choosing the right employees to complete the task. When creating your team, you want your most reliable and trust-worthy employees. They should be familiar with all of the products and where they are located. It’s often a good idea to add a younger employee to the team so that they can eventually step into a leadership role. Another option if you don’t have the manpower to complete the inventory in-house is to consider hiring a third-party inventory consulting service.
5.Label Everything
As you perform physical inventory counts, make sure that you label everything. Labeling everything makes the process run smoother and increases the accuracy rate. Make sure that your products are stored in clearly defined areas and create a map of your entire store’s layout. This should help guide your team and keep them organized. Zone in on high-risk areas around the store.
6.Inventory Report
Once you have finished your inventory, double-check everything, and go over your inventory report. This should help you analyze which items are in high demand and where you might have experienced some unexpected losses. Don’t forget about items that do not have an assigned category. Managing uncategorized inventory will help prevent confusion over the total inventory count.
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