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How to take a good physical inventory of your business

Learn how to do an inventoryWhen it comes to physics, it is not done from the counting and comparison of stocks but extends to determining the costs of the goods, checking how it moves and making decisions about old goods. physical inventory of your business

Step by step to learn how to take an inventory

Follow this step by step and you will learn how to do an inventory:

Step 1: First of all, you must plan the inventory determining the way in which you will carry out the count, without affecting the activities of your business, gathering all the merchandise with the same characteristics, labeling them and verifying their barcodes. In time, gather your business staff to record the information.

Step 2: Make an order in the stocks sorting them by product. All products must be in their corresponding sector before counting and of course encoded.

And sort out old or damaged products before beginning inventory and check each box to make sure they are not empty and there is no product swap.

Step 3: If you need to register products in transit, try to make them the smallest possible quantity and as they belong to the temporary warehouse, identify them depending on whether they are mixed with those of the main warehouse.

Step 4: Define the unit of measure for each merchandise and make it functional. But since everything has to do with the type of products you sell, it is likely that you will find it difficult to count each piece, you will not be able to count it by unit, so use a scale and you will estimate the pieces by gram or kilo and transmit your decision to the staff. .

Step 5: Make the count of the stocks in a blind list so that the theoretical stocks cannot be visas by the staff and determine pairs to do the count defining the areas of each pair and tell them to mark the location of the counted merchandise.

Step 6: Perform two counts each one made by different people and take your theoretical inventory to make comparisons of physical quantities with it and then make the necessary adjustment according to the reality of your file or system.

Consider a zero deviation for the higher value merchandise and less than 2% for the lower value merchandise. Anyway, more serious deviations than these may arise, so you must make sure that you have taken into account all the warehouses and you should also check the history of the movements because it is likely that you are not taking into account the products of the temporary warehouse, for that reason you will give account when considering in and out of distribution center. ´

In fact, the deviation percentages are reduced when registering the movements of the warehouses.

How to inventory merchandise

The traditional way of solving how to do an inventory It is the periodic inventory, which you will carry out once a year, counting everything that makes up your assets with meticulous work.

But you can also do an inventory reconciliation every day if you sell few products and even with a computerized system you achieve a much faster and more accurate method.

How to do a product inventory

To make an inventory of products you must control everything that enters and leaves your business within a certain period of time.

With a computer program you can manage the databases, you will code the products and order your warehouse. So if you have controlled the products before inventory, you can quickly make a list of everything that exists in your business and the products sold.

Classify products according to their value or by current and fixed assets. Current assets are those that are for sale and fixed assets are those that remain in the company.

Practical tips for taking a physical inventory

As a retailer, doing physical inventory counts is probably not on your favorite things to do list. It can be a tedious task, considering the merchandise in the store can take hours, and for some merchants, it also requires closing the store temporarily.

But even if it’s a job you don’t like too much, doing a physical inventory count is a must for any retailer. Keeping a close eye on the stock you have on paper compared to what’s in stores allows you to maintain inventory accuracy, spot the causes of shrinkage early on, and ensure you always have the right amount of stock at the right time.

To help make this easier for you, we’ve put together some practical tips on how to count inventory, when to count it, and more. Check them out below:

1. Doing a physical inventory count? Consider cycle count

Have you ever tried to count cycles (also known as partial consumptions of shares)? It is the process of partially counting merchandise on a continuous basis so that you can control stock levels without interrupting store hours. Known as one of the most efficient inventory counting methods for retailers, cyclical inventory can be done on a daily or weekly basis (usually before the store opens) and can free you from having to do full inventory counts.

Philip Pravda of SuitCafe.com highly recommends this method. I had four luxury menswear stores and my method of doing physical inventory was almost daily, ”he shares.

Pick small sections of the store, or a particular brand of shirt, suit, coat, etc. I counted them in style numbers and sizes. Then I would walk to my computer and compare. Taking an entire store inventory for a small business is difficult because you are always helping customers and you certainly don’t want to close early or for a full day to take inventory.

Similarly, Preston Wily of the e-commerce site SewellDirect.com He says that taking part inventories counts on an ongoing basis has worked well for them.

Our shipping department employees are assigned a few weekly audits: high-volume products are audited much more frequently than low-volume vendors, but each product is counted at least once a year, ”he says. “We also catch problems much earlier, which prevents them from turning into big problems.”

2. Use technology

Traditionally, physical inventory counts are done with a pen and paper. The staff would use a physical inventory count sheet to count the products and reconcile the data in their system.

Although this method can get the job done, it is highly inefficient and requires double entry. Not to mention, since physically counting inventory is already a “manual” task, the last thing you need is to manually count and record the data.

If you are using POS or inventory management software, check to see if it offers inventory counting features that you can use.

Vend’s Inventory Counts capability, for example, enables retailers to account for their stock in the simplest way possible. Features like simultaneous stock acquisition enable the use of multiple devices for faster stock counting, and Vend’s quick scan mode feature allows retailers to count inventory using their barcode scanner or searching for SKUs.