Do you dread the annual physical inventory count? If yes, then you are not alone. Retailers across the globe find the whole process of counting inventory, time-consuming and unsettling. Today, we will talk about how to run your inventory count so that you get the most benefits with the least hassle.
What is a physical inventory count?
A physical inventory count is the process of counting all your products in your retail outlet in person. Usually, physical inventory counts are performed by an assigned worker or a dedicated team of workers who physically count the inventory levels of each item at both the shop and the stock room. Then, the inventory levels of each item are recorded either with pen and paper manually or electronically with the help of a mobile device.
Despite being extremely tedious and cumbersome, a physical inventory is not just a compliance issue, but also offers valuable insight into improving operational efficiency.
To save time and to maintain accurate inventory levels, several retailers opt for a process called cycle counting.
Now, let us discuss the concept of cycle counting and strategies to enhance inventory counting efficiency.
What is cycle counting and how does it work?
Rather than counting your whole stock at one go, cycle counting is the process of counting smaller amounts of inventory, periodically. This is considered as a highly efficient method of inventory counting, as it helps in maintaining accurate inventory levels without interrupting the normal business or putting in extra hours or efforts.
Conducting cycle counting is easy. You can start with selecting a product or a section of your store, start counting, and indicate their SKU number and other details like size, colour, type, etc. Once the counting is done, you can tally the number of inventory you counted with that stored in the POS system.
Tips to maintain accuracy in physical inventory at the store :
- Use inventory scanner or other stock counting technologies : Replace the traditional method of counting inventory and tallyingusing pen and paper with a new and smart POS or inventory management software. POS offered by industry leaders like Intellect Commerce offers several features that can help you in counting, saving and analyzing data.
- Select your counters wisely : Be very careful while assigning the work of inventory count to your employees. Select experienced employees, as well as those who can give a fresh perspective. You can also hire third-party inventory counters if you lack the time, manpower or expertise to do so.
- Schedule it at the right time : As the whole process of inventory count is time-consuming, you must plan it in a manner that it does not impact your work, especially during the business hours. Try to plan it on days when the SKU (Stock-Keeping Unit) levels are at their lowest. You must also inform the stocktaking team well in advance. If possible, count the inventory before or after the business hours. However, if you feel that you will have to shut your shop for a few hours to complete the process then please inform your customers well in advance.
- Map your store : Empower your team to conduct the counting faster and smoothly by drawing a map of your store and stock room, and labelling where each and every product is placed. Armed with a labeled map of your store and the stock room, will even help you in dividing work and assigning a particular product/ products to particular employees.
- Label shelves/ boxes properly : Staying organised can help streamline the process of physical inventory count. However, at times, some lost items or products that are not packed in the right boxes can create discrepancies. Hence, it is advisable to keep your stockroom organised by identifying such items, placing them in boxes, and labeling them correctly. Storing all the products in their defined areas and training your staff to categorise and place them correctly will help you in the long run.
- Dealing with inventory that is still in limbo : Though you have organised everything, labeled boxes, assigned work to your team members and handed them with navigation tools, you realise that there is still some inventory that is in transit, products that have been returned by customers, or faulty products. In such a situation, it is imperative to process and deal with them before performing the count.
Once you’ve finished counting your inventory, you need to conduct these quick steps to enhance your inventory accuracy-:
- Double-check your inventory count : Just to ensure that you have counted everything correctly
- Pull up inventory reports : A smart POS with reporting and retail analytics ability can help you analyse data and use those insights for business decisions
- Pinpoint high-risk zones : Identify high-risk zones or regions in your stores that are susceptible to theft or shoplifting
- Compare several completed inventory count reports : To identify patterns, discrepancies, and understand what inventory practices are working
Now that we have understood why inventory counts are an important component of running a retail business, understand how to get it right. Request for a free demo of the iRetail software from our retail specialists: Request Demo