It is recommended that companies take an annual inventory to keep their records up-to-date and to help you analyze how things have developed during the year. An annual inventory is not as simple as it sounds and should be well prepared. Read on for more information on what you need to understand when taking your annual inventory.
What is an inventory?
An inventory is a way to verify the amount of inventory your business has on hand at a particular point. Generally, the stock you have should match your current records, and this information can be obtained by checking the stock. However, this is an ideal situation and records do not take into account deterioration and theft which can reduce what you have in your inventory.
Inventory allows you to reconcile what the records say and what is actually present. Taking inventory is a considerable activity, especially for large companies that have many products. Here are some steps to take the correct inventory.
Select a suitable time
Chances are, your business is running during the holiday period, so you shouldn’t interfere with regular business hours to take inventory. Choose a specific time outside of normal business hours, such as a holiday or weekend. You can also outsource this service by contacting best inventory management companies.
If your business has a small amount of stock, you can choose to do it early in the morning or after business hours.
Identify the location of the stock
It is conceivable to have stocks spread across multiple locations, for example stores, distribution centers, and warehouses that are probably not necessarily close to your physical store.
Make sure each of these warehouses are cleared and well organized for inventory as you must record the stock stored there. Be that as it may, it must be ensured that the stock is separated in your store, and that it is still in the warehouses in several categories.
Make use of a system
We live in a technological age, and traditional forms of inventory should not be given up. Implement a system that makes it easy to record inventory and monitor it. Have a plan on which locations will be counted first, and if you have the capacity, have staff members count stocks at different locations simultaneously.
If you count stocks manually, have two people do it so you can compare what they get and see if there is any inconsistency. An automated system will make work easier, as stocks can be counted by scanning barcodes and it will be difficult for people to try to hide stolen goods.
You should try to have a comprehensive inventory system that captures all the products your company owns. Count each item and do not assume current inventory data or make assumptions.
A complete inventory helps tell you what’s available, so you should even open boxes if necessary. Search the stores and try to find any stock that may have been forgotten in the daily operation of the company.
Update your records
Once the count is complete, check the actual numbers and what the records say. This will help resolve discrepancies between the two numbers and give you an idea of how your business is going.
An inventory does not need to interrupt your business, and helps provide you with the information you need to make better decisions. Plan your inventory well, and once you do this, you’ll be in a better position to plan well next year. For better results, consult inventory management companies.