Getting your products to your customers on time is crucial for your business. But inventory problems are common and come from myriad sources, including inconsistent tracking, lack of efficiency in the warehouse, inaccurate data, sudden fluctuations in demand — the list goes on. It can seem like a complicated puzzle to get it right. One of the most important pieces of that puzzle is physical inventory counts, which are likely eliciting a groan from you right now. The process is long and tedious, but it’s vital to the health of your business. You may do it once or more each year.
Let’s talk a bit about those inventory counts, the benefits of doing this necessary task, and some tips on getting it right, including how a warehouse management system can help.
Physical inventory counts
Companies usually count their inventory at the end of the fiscal year. We get it; nobody likes this process. But doing it and getting it right provides several benefits, including:
- Physically counting your inventory ensures it is accurately counted on the balance sheet.
- Accurate counts increase profitability by allowing you to have enough inventory to meet your demand, but not too much to create a glut.
- It ensures compliance with accurate valuation.
- Accurate counting controls shrinkage by identifying inventory discrepancies.
- You’ll increase your customer satisfaction via accurate inventory because you’ll be able to get the product to the consumer on time, when they need it.
Tips for a successful physical inventory count
Here are some tips we’ve learned over the years working with our clients. It’s about making sure your count is as accurate and successful as possible.
Timing
As with most things in business, timing is everything when you’re scheduling your inventory count. You should schedule it:
- Outside normal business hours. You don’t want to disrupt your day-to-day with this yearly task.
- Before vs. after busy season. It’s important to have enough inventory on hand to meet your needs if you have seasonal surges in demand. Counting your inventory before that busy season ensures you’ll have the stock you need.
- To allow enough time to fix any discrepancies. You don’t want to be behind the eight ball during a busy time when you find inventory snafus.
Transparency
If you might be down for a day, or even hours, when you’re completing your count, let all important players know it’s happening.
- Notify relevant teams, vendors, suppliers and anyone else you do business with.
- Alert customers of potential delays.
- Fulfill orders in advance of your count, if possible. This gives you some breathing room if problems do occur.
Tidiness
It’s important to be tactical about your count. You should:
- Take time to organize the warehouse and inventory before you count it. Everything in its place helps assure you’ll get an accurate count.
- Map it out and make a specific plan, giving employees quadrants to work on if necessary. It’s important everyone knows who’s counting what.
Technology
The right technology can be of immeasurable help in the inventory counting process. Scanners are a must. And the right inventory and warehouse management system makes the process faster, easier and more efficient. An Enterprise Resource Planning System can optimize your data so that you’re working with the most accurate, current information.
As a NetSuite Business Solutions Partner, GBS can help you harness the power of technology to ease the counting process, making it more accurate as well. Contact us at Green Business Systems to learn more about how an ERP software system can help.
