The annual count is crucial for inventory management throughout the year. An annual inventory count allows you clean up your records and provides your business with validated records to manage. Typically stores will choose to conduct their count at the end of their season or during a slow period of the year. As retailers you have a lot of inventory to manage, so executing the annual inventory count correctly is vital to making informed buying decisions later. Before you shut the store down this year for the annual count, let’s review some strategies on how to optimize your inventory count this year.
Organize your inventory
Before you even think about counting your entire inventory you need to take the time to organize it. Keeping the inventory organized is a large task in itself, so take this opportunity to really get things back to the way they should be. While you are cleaning things up, make sure all of your stock is visible. Nothing should be tucked away in a back corner. Your inventory needs to be organized in a logical order, so that it can be counted efficiently. All items that are not part of the count should be moved to a separate area. This preparation will minimize the amount of down-time during the count.
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Avoid double-counting stock
There is nothing worse than double-counting stock. It leaves you with a mess to reconcile later. To avoid the issue it’s important to identify problematic stock and take the correct course of action before the count. First, you should isolate your obsolete or dead stock that shouldn’t be included in your final inventory numbers. Those items should be counted, recorded and disposed of or packed away a few days prior to the annual count. Next, you should figure out how to deal with inventory in transit (The products you have ordered and are waiting to receive). One way to deal with those items is to wait and count them once they are received and then add them to your numbers later. If those in transit items haven’t been processed through your inventory or your accounting systems, then they shouldn't be on your count at all. Finally, do not move your stock around once you have started your count. If you have stock in multiple locations send your staff to each location rather than having the stock come to them.
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Set up inventory count controls
There are many components to orchestrating an inventory count. All components need to be clearly defined and assigned to your staff correctly. The annual inventory count normally requires all your staff to get the job done. Everyone participating in the count should have a clear set of instructions and should be held accountable for those responsibilities. Segregated roles help to keep everything running smoothly. Spot checks are also a good practice to ensure accuracy. A common and effective strategy is providing everyone with pre-numbered count sheets as a guideline for your staff to follow. These controls will prevent any chaos or confusion during the actual count.
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Reconciling variances in your inventory
Variances are going to happen, but with some preparation you can cut those variances down. During your count there will be variances between your ledgers and your actual product count. When this happens, don’t panic. Simply start with classifying the significance of the variances. If it's off by a couple of items simply have another staff member recount that item, as it may simply just be a miscount. The larger variances will require further inspection once the count is over. There are many potential causes for a significant variance, but most are administrative errors which take time to find and correct. After the count you can take your time to correct those significant variances.
Now that you are equipped with a few new tips, it’s time to start organizing your store for your count. Let us know if these tips helped make this year's count more efficient.
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