What is inventory count ?
Inventory is a term used to describe the items that are available for purchase. The inventory count is the number of units of an item that are currently sold, and it can have an impact on a company's profitability. Inventory can be calculated using a variety of methods, including shelf space and order backlogs. Some managers keep inventory on hand and update it on a regular basis, whereas others may rely on periodic inventory reports from suppliers or distributors. To accurately track your inventory count, you must first understand your production capacity, the products you sell, the number of customers you have each day, and how quickly you sell them.
How to Carry Out Inventory Count? The Most Effective Method
What is an inventory count?
The inventory count, also known as stocktaking, is the physical verification of the quantities in an inventory or warehouse, as well as their condition. You can determine both your assets and your obligations by doing an annual inventory count. All of a company's assets (as well as all of its liabilities) should be listed. The goal of this technique is to figure out how much inventory there is. Traders and business owners should utilize a merchandise management system to determine what is in their warehouses on a regular basis. An inventory count allows a business to know exactly what goods and assets it has and where to find them fast. It also checks to see if the inventory you believed to have is accurate. It's not unusual for the actual inventory to not correspond to the book balances.
Why is inventory management so important?
Inventory management is a critical component of any business. Having the right amount of inventory can help you save money, provide better customer service, and help your business succeed in the long run. Keeping track of inventory, on the other hand, can be a difficult task. It necessitates constant monitoring, regular checks for restocking requirements, and a thorough understanding of the products you sell. If you don't know how to manage inventory properly, your business may miss out on opportunities that could keep it profitable.
Inventory count is a difficult metric to measure
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How to carry out an inventory count?
The inventory count is one of the most important steps in a business. It is a process that's crucial to making sure your company can supply its customers with what they need and when they need it. It involves inspecting each item for quality and quantity, ensuring you have what you need on hand. So, how can one carry this process?
Here are a few steps that you must follow to count inventory-
Order count tags
Order enough two-part count tags to cover the amount of inventory that will be counted. These tags should be numbered sequentially so that they may be tracked individually during the counting process.
The warehouse workers should be notified if part numbers are missing or items look to be in a condition that would make counting difficult. This will allow them to make any necessary changes for the upcoming inventory count.
There are many different ways to go about counting inventory
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Pre-count any products that can be stored in sealed containers. Seal them in the containers and label them with the quantity. This simplifies the counting process during the actual count. If a seal is broken, a counting team will know that the contents of a container must be counted again.
Complete data entry
If any data entry transactions need to be performed before the physical inventory count, do so now. This comprises issuances from the warehouse, returns to the warehouse, and transfers within the warehouse between bin locations.
Notify outside storage locations
Notify any outside storage facilities or third-party sites where company merchandise is held on consignment that they must count their inventory on hand as of the official count date and forward this information to the warehouse manager.
Freeze warehouse activities
Stop all deliveries from the warehouse and put any freshly obtained goods in a separate area where they won't be counted. Otherwise, during the inventory count, the inventory records will be in a state of flux and hence will not be completely reliable.
Instruct count teams
Assemble two-person teams to count the inventory and train them on how to do so. These responsibilities entail having one person count inventory while the other records the data on a count tag. One copy of the tag is attached to the inventory, and the other copy is kept by the team.
The count teams are given blocks of count tags by an inventory clerk. Whether or not the tags are used, each team is accountable for returning a certain numeric range of count tags. Maintaining control over all count tags means that any missing tags are quickly investigated.
Assign count areas
Each count team should be given a defined range of bins to work with. Make a note of these locations on a warehouse map with a highlighter. The inventory clerk should keep track of which parts of the warehouse have been counted and whose teams have been assigned to each area on a master list.
Each team must have one person counting a specific item within a bin location, and the other team member recording the bin location, item description, part number, quantity, and unit of measure on a count tag. The team must then keep the original copy of the tag and attach it to the inventory item.
Ensure that all tags have been returned on completion of the inventory count. Assign a new area to the count teams and issue them fresh blocks of count tags as needed if there are more warehouse locations to be counted.
Enter tag information
Fill out an online data entry form with the information from the count tags. Print a report showing all tag numbers input, ordered by tag number, and look at number discrepancies, if any. This will verify that the file contains all of the count tags that were issued.
Investigate unusual results
Re-sort the inventory report in a few different ways to locate unusual data, and check the tag entry connected with each inventory.
Use inventory software
Completing an accurate physical inventory count takes a substantial amount of time and effort. This is one of the reasons why organizations limit the number of counts they perform each year. However, inventory management software, such as Zip Inventory, can assist you in expediting this process while maintaining accuracy. Inventory software can assist you in reducing workload and saving time.
Why is inventory counting important?
Inventory monitoring can detect stock problems and alert organizations to prospective issues. In any event, successfully managing stock is the first step in running a successful firm.
This is why inventory counting is important -
Identifies inventory problems
There are various issues that can occur with inventory revealed in the count. These include broken stock, unfinished orders, stuck orders, poor inventory management and errors related to them. This should be a starting point for further inquiry into these areas of concern.
Evaluates product performance
When a catalog contains a large number of products, it can be difficult to determine which things contribute positively and which do not. A stock take might help identify products that are no longer selling. If the remedy is to remove certain products from the catalog or adjust their pricing, a plan can be developed for this group of products.
Improves stock orders
Most times it's tempting to order extra goods to compensate for low stock levels, but this impacts company's cash flow. In reality, the products are frequently present but not in the correct location in the warehouse.
So, a count of your inventory reveals inconsistencies that you were previously unaware of.
Makes theft transparent
Product theft is an unwelcome and common occurrence in retail and consumer goods. It is possible that sensitive goods were stolen during transport, resulting in incorrect stock numbers when the goods are received. It is also possible that temporarily hired staff is a cause of stock going missing. In any case, conducting a stock count reveals which product categories are the most vulnerable.
Brings you closer to your goal
If there is a significant discrepancy between the count findings and the bookkeeping administration, something is wrong. It is critical in these cases that they are identified as soon as possible so that they can be dealt with immediately to get the company closer to its goals.
The types of inventory count
Cycle counting, spot counting, and tag counting are three of the most common methods of counting. Let's understand these methods in detail-
Cycle counting is exactly what it sounds like- numbering in cycles. You don't count your entire inventory at once; instead, you do it in stages. Every month, week, or day, a different section of the store or warehouse is counted. Product categories, product groups, and warehouse/store zones can all be used. You can also choose different cycle lengths for each differentiator.
Ad-hoc counting is initiated by the user and is frequently unplanned, making it extremely useful in unusual circumstances. Assume you counted a zone, but the system went haywire a few days later as a result of someone or something. Instead of waiting for the next cycle count, create a new empty order and start adding counted items to it.
Of course, your system should be able to compare the quantity counted to what is stored in the software. Ad-hoc counting is also known as a spot or blind counting because it is unplanned and used for small store/warehouse sections or zones.
Employees at the store/warehouse should place a physical tag on each item in preparation for tag counting. During the counting process, the worker must fill in the item ID, counted quantity, and any other pertinent information on the tag's allotted places. Some tags have two sides, allowing a second worker to verify the data and, if necessary, correct it on the second side. These tags are gathered and entered into the system as journals after the counting is completed.
The primary distinction between tag counting and all other inventory costing methods is that you don't have to compare your results to the system data right away. It's more like making a rough list of your things and quantities, polishing it, and then just establishing a counting order and matching it against the tag counting list.
Inventory counting tips during Covid19
Getting an inventory cost can be a time-consuming process that involves a large number of items and members. There is a lot that needs to be done, which is one of the reasons for such a large staff requirement. However, carrying out such large inventory counts during Covid-19 can be difficult. So how can you go about it? Well, we bring you a few inventory counting tips during Covid-19.
Count products on your own
The most efficient way to count inventory is to do it yourself. However, this would not be practical for large-scale businesses, which is why they should use inventory counting software. you must check Zipinventory Features, it is a both small business inventory app and for large-scale businesses.
It's important to include an inventory software stock inventory to avoid the spread of the virus, small businesses can still do their inventory counting or hire someone to do it for them if they plan on not investing in inventory software.
Practice physical distancing
In unavoidable circumstances, you must practice physical distancing by drawing distancing lines or circles in the warehouse or store to keep employees safe from one another. Also, monitor their body temperature every day to keep any staff that could have caught covid-19 away from the rest.
Use physical contact-limiting devices
The fewer objects or devices with which you interact, the better. Only one gadget should be used per person when counting products. Use a stock counting app like Zipinventory instead of a clipboard and pen and paper, which individuals can download to their phones and use without any additional equipment.
Also, try to keep your product handling to a minimum. Instead of pulling something up off the shelf, use a
mobile barcode scanner.