How to do inventory: A complete guide from start to finish
If you’ve ever had to do inventory at your job, you know it can be a pain. You’re stuck in one place for hours on end, counting and recounting items. It’s tedious work, and it’s easy to make mistakes. But there are ways how to do inventory easily. In this guide, we’ll show you how to do inventory like a pro. We’ll give tips on everything from cycle counts to post-inventory actions. By the time you’re done reading this, you’ll be an expert on all things inventory-related!
What is an inventory count?
An inventory management system keeps track of what products are currently in-stock and in what quantity.
An inventory count is a physical count of all the products in your stock. This helps you determine how much product you have on hand, as well as the condition of that product.
An inventory count allows you to compare the physical stock levels in your possession against the records you have kept in your inventory tracking system. This helps ensure inventory accuracy and can prevent issues such as theft or loss.
Do they match up? If not, ask why, and work on reducing the discrepancies.
Inventory can be counted using different methods, including annual or quarterly inventory reports, or cyclic or rolling reports.
How to Manage Your Inventory
Before you can successfully manage your inventory, you need to know what products you have on hand. Here are the common products that businesses have in their inventories:
There are four different types of inventory: raw material, work in progress, finished good, and in-transit.
Sorting your inventory into categories can help you more effectively manage your stock. For example, you would likely store and sell finished products differently than raw materials.
Many small businesses do not have good inventory management techniques, which can lead to less profit.
Some businesses don’t have enough stock to meet customer demand, resulting in disappointed customers who may look elsewhere.
This can often drive customers away to another business, or even permanently.
While over stocking products can be a great way to ensure your customers always have what they need, it also comes with some risks. Over stocked inventories tie up your capital, cost you more in storage, and make it more difficult to track your inventory.
Having too much inventory not only wastes cash flow by tying up resources, but it also costs more to store and manage the extra products.
You can either have an inefficient inventory management process that is easy to maintain, or you can have an efficient inventory management process that requires more work but results in higher profits.
10 Essential Tips to Effectively Manage Your Inventory
In this guide, we’ll teach you how to better manage and track your stock for increased productivity and profit.
How to Prioritize Your Inventory
Having an inventory of essential but expensive products can be a headache. By organizing them into a priority group, you can better understand how frequently you need to replace them and in what quantity.
Most experts say that categorising the A, B and C categories of your lead list can help you better target your marketing efforts.
A items are your high-ticket items that you’ll need fewer of. C items are your lower cost items that will turn over quickly.
B items are a mid-range price between A and C. They sell faster than A items and slower than C, but are still popular.
How to Manage Your Business’s Inventory
To keep track of your business inventory, make sure you keep records of your stock keeping units (SKU), barcodes, supplier information, country of origin and the lot number.
Tracking your costs will help you be aware of any factors that affect your cost, such as seasonal or market factors.
Our partner vendors can help you manage your company’s stock with information pertaining to an inventory management software. Fill out our form, and we’ll connect you with the right professionals.
3 Ways to Improve Your Inventory Management
Some business do spot checks of their best selling products on a daily basis. Some do monthly, weekly, and even a daily check on their top selling product.
It’s crucial that you check your physical stock levels on a regular basis, even if it’s just once a month. This will ensure that your inventory records match up with the actual amount of products you have.
4 Ways to Analyze Supplier Performance
If your inventory is constantly being affected by an inconsistent or tardy delivery schedule, it may be time to find a new vendor.
Talk to your supplier about the problem and try to find a solution. If you can’t, be prepared to find a new supplier or deal with shortages.
5 Ways to Maximize Your Inventory Management
80% of your profit comes from 20% of your merchandise, so it’s important to manage inventory items that bring in the most revenue.
As an entrepreneur, it is important to monitor your sales cycle in order to maximize your profits. This entails keeping track of the number of units you sell in a month or week, and ensuring that you maintain an adequate inventory. By doing this, you will guarantee that you are profiting from your highest-profit products.
6 Ways to Improve Your Inventory Management System
Do you have a standard process for stocking in-inventory products? Or does each of your workers do it differently? Even if it’s minor, any variation in how your employees stock inventory could lead to big problems.
All employees should verify, receive, and unpack all boxes of merchandise at the same time. All products should be accounted for and checked against your inventory list.
7 Ways to Track Sales
This seems like an obvious tip, but it’s important to know what you sold at the close of each day. You should also update your inventory totals daily.
But beyond this, it will be beneficial to you to analyze the data.
Knowing which inventory items are selling and which aren’t can help you better manage your stock. Are there items that always sell out? Are there items that are slow sellers? Are there days or times that you sell more?
8 Ways to Save on Inventory and Order Restocks
The advantage of using a vendor to manage your inventory reorders is that you can free up staff time and save on the cost of labor. Additionally, using a vendor can help to ensure that you are getting the best possible prices on the items that you are ordering.
Remember that your suppliers have very different goals than you do. They want to sell their products, while you’re more concerned with the products that bring in the most profit.
Make sure you keep on top of your inventory and reorder items yourself.
9. Inventory Management Software for Small Businesses
If you’re a small business, you can manage these first 8 items with a spreadsheet and notebook.
As your company expands, you’ll need to spend time on inventory management so that you don’t run out of products.
When it comes to inventory management, having the right software solution in place can make all the difference. Before making a decision on which software program to go with, be sure to take into account what your specific needs are and whether or not the chosen software will offer the necessary analytics for your business. Ease of use is another important factor to consider.
10 Ways to Improve Inventory Management Software
There are several different ways to manage inventory, including using an inventory management system, a mobile scanner, and a point-of-sale system.
When purchasing new technology, look for ones that work well together.
Having an inventory management software that can’t communicate with your POS system can lead to errors, as you’ll need to manually enter the data yourself, which could result in mistakes.
The benefits of a using a barcode scanner for inventory counts
Barcode scanning for counting your inventory can add an extra layer of accuracy to your count.
The devices allow team members to quickly and accurately complete their weekly counting quotas, without the need for tags or messy paperwork.
There are several steps that are typically involved in counting with scanners.
When using a barcode scanner to complete inventory counts, you will be able to log in and see a list of products that have been assigned to you. You can then go to the bin location of the first product, scan its barcode, and start counting. Any inventory discrepancies can be corrected right on the screen before moving on to the next product.
With Bob’s new scanner, he can now check off all the items on his inventory lists without having to physically touch them. This allows him to work much faster and reduces the risk of error.
How to Do Inventory for a Cycle Count
With this method, you divide your annual or semi-annual count into smaller, more manageable parts. This means that your inventory is counted in chunks throughout the year, which allows you to avoid the hassle of a physical inventory count.
For instance: Let’s say you have two warehouse workers responsible for inventory counts – Bob and Jenny. Here’s how a cycle stock count could work:.
So, if your company had 10,000 items in your inventory, this is how the counting process would go: First, each of your two employees would be responsible for 1,000 of the 10,000 total. Then, they would each be responsible for 1,000 more, leaving 2,000 for each of them. Then, they’d each be responsible 2,000 more, and so on until they’ve each accounted for 5,000 of the 10,000.
If you want to do a cycle inventory count with just two people, assign small counting tasks to your team members on a weekly basis. This way, you can count your entire inventory every five weeks easily.
Advantages of an Inventory Cycle Counts
Physical inventory checks are becoming less popular as companies turn to continuous, or cycle counting of their stock.
Cycle counting is a great way to keep your inventory counts accurate without disrupting your business.
Some of the advantages of doing inventory counts are:
More agility to fill orders
By cycle counting, you can better keep track of your inventory by periodically checking smaller batches of your items. This can help minimize discrepancies in your purchasing system, resulting in less stock-outs.
If you want to meet your customers’ needs and boost your profits, you should schedule a monthly count of your top selling products. This will let you keep an eye on your inventory and make sure you always have your best selling items in supply.
Up to date product information
Having an inconsistent or incorrect count of your inventory can have serious consequences. Having too many or too few items in stock can both lead to increased costs and unnecessary waste.
You recognise shipping breakdowns quicker
By conducting regular cycle counts, you can keep accurate track of any shipping, receiving, or inventory issues.
This can help save you money on shipping costs, as you work to correctly update your inventory records and satisfy your customers.
Reduce errors and theft
By frequently checking your inventory, you can spot errors or inconsistencies faster. You can also detect any instances of employee or customer theft and take appropriate measures. By regularly monitoring your stocks, you can ensure that your business is operating smoothly.
An annual inventory count can be time-consuming and disruptive to your normal systems. It may require working overnight and can be exhausting for your employees. You may need to bring in additional help.
A cycle inventory count is a more efficient way to count your inventory. You can count small batches at a time, without having to shut down your operations. The counting process is also integrated into your normal workflow, so it causes less disruption.
What to do after an inventory count
Now that your stock take has been completed, it is time to follow up with the information you have gathered. Check for any glaring errors and investigate them. Also update your spreadsheet with any new or updated information.
After reading this guide, you should be an expert on how to do inventory. You’ll know all the tips and tricks for making the process easier, from cycle counting to post-inventory actions. So next time you’re stuck counting items for hours on end, remember: there’s a better way to do it!