Conducting accurate inventory counts is an excellent way to keep your operation profitable and avoid overspending or wasting money on stock you don’t really need to keep on hand. It’s also a good way to identify potential theft.
Is your inventory under control? Do you know whether your counts are accurate? Are you struggling to get your employees to be more diligent?
Here are some powerful ways to improve the accuracy of your inventory counts.
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1. Use software
Manual inventory tracking isn’t likely to be accurate no matter how hard you try. Human error is an inherent possibility when you rely on manual methods.
You might not ever become aware of the missteps, such as miscounts and misplaced items in the storage areas. Without software, you don’t stand much of a chance of obtaining accurate figures.
If you’re like most company owners, you’re probably doing cycle counts to avoid having to shut down activities during working hours. This is smart, but if you use software to do your cycle counts, you’ll see even greater benefits.
For example, items can be scanned into and out of locations as they are moved or sold, which helps keep on-hand counts exact. By the time you do a cycle count, items are more likely to be in the right place.
When employees are trained to scan items in and out of proper locations, this enables your firm to count the number of items in a bin visually when you do cycle counts. Otherwise, you’d have to sort through bins of mixed items before you can count anything.
Let’s accept that it’s virtually impossible to achieve 100% accuracy, but you can get pretty close with the right software.
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2. Discipline the rule-breakers
If you discover employees who are disregarding company policies that apply to inventory, discipline them accordingly. Letting this sort of thing go is liable to make them encourage others to fall into bad habits.
Say that some workers neglect to scan items into the right location to save time or because they’re focused on helping a customer with an urgent issue. Train your staff to hustle, but not overlook protocol; and if your policies impede staff from serving customers well, investigate a potential alteration in your systems.
Sometimes, employees don’t break the rules on purpose. Mistakes are often innocent and you might just have to talk to your people once or twice to get them on the right track.
If you notice gross errors, however, such as items being stocked on the shelves in the wrong spot or stock bins being loaded with the wrong product, take action.
3. Don’t flex items without adding the right label
There might be times when employees need to flex products across the shelves to cover empty spaces, and that can be problematic. If you allow this practice, require correct product labels to be placed on the shelf when items get substituted even temporarily.
Placing the correct labels in front of all products gives customers the right information and price, and helps prevent inaccurate inventory counts.
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4. Use monthly cycle counts
The most efficient cycle counts are 30-day periods. With this method, you’ll count 25% of all inventory each week. By the end of the month, you should have a reasonably accurate count.
Having employees count inventory on shift will help you save payroll dollars, but you can also count after hours if it’s too much of an inconvenience.
Monthly cycle counts are more accurate than biannual counts. However, you might carry too much inventory to cover it in 30 days.
In that case, set a cycle that meets your needs. You might require two or three months, and that could be acceptable.
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5. Hire a professional inventory company
Many retailers hire professional inventory management companies to do their counts. There are substantial benefits to this approach.
For one thing, an outside specialist can perform a full count overnight or across a period of days without disrupting your business. Your inventory counts will be completed faster, and since the counters are professionals, they’re more likely to arrive at accurate results.
If you have any specific needs or quirks, you can train the team to meet them.
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Prioritize accurate inventory
No matter how you approach inventory, prioritize accuracy over just getting it done. Your employees probably won’t like doing inventory counts, but that’s no reason to allow them to get lazy.
You might want to offer premium pay to give them an incentive to achieve accuracy. The more on-target your inventory counts are, the less money you’ll tie up and the better you’ll serve your customers.
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