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At the start or end of every workday, you can instruct employees to carry out a small portion of
cycle counting inventory. This can help you maintain accurate stock figures, prevent loss, and
catch theft quickly.
2. The seasonal method
If you sell seasonal goods, you may want to focus on those during their prime sales periods.
Instead of counting summer clothing in December, you dedicate resources to counting the items
that are selling right now. This gives you the opportunity to fix errors and compensate for stock-
outs while those items are still selling – otherwise, you run the risk of running out of your best-
sellers right in the middle of the season.
3. The arbitrary method
Some retailers implement inventory reconciliation in a systematic, arbitrary way. You can count
items based on their physical position in your stockroom, or based on specific departments,
suppliers, types, and brands. You may wish to start with one corner of the store and move to each
one in turn so that most of the store remains operational throughout the process.
Whichever system you choose, the best way to save on the time and labor expense of inventory
reconciliation is by using a modern inventory system — specifically, one that can update in real-
time. When employees need only scan an item to identify it in the company database,
reconciliation moves much faster than when each employee is competing over a single
spreadsheet.
Further Reading
If you need more advice on counting and reconciling your inventory, check out Vend’s Complete
Guide to Retail Inventory Management. This handy resource offers advice and action steps to
help you:
Set up your products and inventory system correctly
Get the right people and processes in place so you can stay on top of stock
Figure out which of issues are causing shrink in your business so you can prevent
them
LEARN MORE
Map your store and take note of the locations of your shelves, racks, fixtures, etc.
Label boxes and shelves, especially if the items inside the boxes aren’t visible
Make sure all items are in their proper places/departments.
Use the right tech
Inventory reconciliation opens up room for human error. Minimize mistakes by arming
yourself and your staff with the right technology.
Counting app – For starters, avoid using a pen and paper when counting and auditing
your stock. For best results, use a mobile app like Scanner, which scans each product’s
barcode and then records the data into a handy CSV file.
POS/ Retail management system – Implementing a point of sale (POS) system that tracks
sales and integrates with inventory can reduce human error and make theft harder to
commit. With a cloud-based POS system connected directly to your stock records, sales
are automatically deducted from company inventory when a cashier scans the product
tag.
A comprehensive POS system includes software for scanning and tracking incoming
inventory as well. Using this system, different functions of the same handheld unit can
scan an item into your inventory, verify it once it is on the shelf, and remove it once a
cashier scans it at the checkout counter.
The result? You’re able to streamline your store processes, reduce mistakes, and stay
on top of your stock.
Case in point: Mom and Popcorn, a popcorn and candy shop in Texas. Mom and
Popcorn used to manage their inventory by hand but finally switched to a modern POS
and inventory management system.
According to Dave Wilson, owner at Mom and Popcorn, this move helped them save
tremendous time and allowed them to streamline their store operations.
“Previously, we had to go to the front of the store to get a physical count of inventory by
site, record it by hand, and then look at a paper catalog to order via the phone from the
supplier. By adding this technology, we’re able to save so much time and money,” he said.
“For example, now we know there is some inventory that takes 12 months to move and we
shouldn’t ever re-order it because it doesn’t move quickly enough. The technology helps us
provide products that people actually want. We’ve gotten rid of around 8-10% of our
inventory that wasn’t selling, and that has allowed us to bring on another 100 items that
are selling better.”
Do it regularly
Keeping a tight ship around inventory requires reconciling your stock frequently.
Otherwise, you won’t be able to effectively address discrepancies or issues like
shrinkage.
Think about it: if you only conduct stock counts once a year, then your inventory report will have
a year’s worth of discrepancies, and it will be difficult for you to pinpoint root causes of your
inventory issues.
The solution? Make inventory reconciliation a regular process. If you’re cycle counting,
then you need to make sure you go through the process on a continuous basis. On the
other hand, if you prefer doing full inventory counts, then ensure that you count all your
items once a month or at least every quarter.
Comparing past reports with current ones will also help you see if your inventory
practices are working. Are discrepancies decreasing over time or not? Whatever the
case, the only to find out is to compare the data.