As a merchant, doing physical counts of inventory likely is not on your list of favourite things to do. A tedious job, taking count of store product can take hours, and for some merchants, additionally, it requires closing the store briefly.
But even if it is a job that you are not overly fond of, taking a physical count of stock is vital for any retailer. Keeping a close watch on the stock you’ve got on paper vs. what is really in-store enables you to maintain inventory accuracy, spot causes of shrinkage early, and make certain you always have the ideal amount of inventory at the ideal time.
Before we go any further, let us first iron out exactly what a physical stock count really is.
What’s a physical stock count?
A physical inventory count is the custom of counting your retail goods in person. The procedure typically involves a retail staff member (or group of employees ) going through the merchant’ sales floor and stock room and counting each product. The information is then recorded either manually, using paper and pencil or electronically with a mobile device.
To objective of a physical inventory count is to audit a store’s stock and make sure that the stock information the merchant has on paper matches the stock that is is really in the shop.
To make this job easier on you, we have compiled a couple of practical pointers on establishing your physical inventory count process, conducting inventory counts, and much more. Check them out below.
Update: Inventory counting tips during COVID-19
We understand that you might be studying while the world is experiencing the coronavirus pandemic.
Perhaps you’re in lockdown mode but still need to be certain that you’ve got a good handle on your inventory levels. Maybe your state or country’s limitations are easing up and you are preparing to reopen your shop.
In any case, here are a couple of tips to stay healthy and safe when counting your merchandise.
When possible, count products on your own or with someone in your household
Limiting contact with people outside your house is one of the best things you can do in order to prevent potentially spreading or catching the virus.
So see if you’re able to conduct physical stock counts by yourself, or with a part of your household for those who have a larger catalogue.
Based on how many products you have, you might want to break your counting up sessions.
If you have to bring in your workers, practice physical distancing
Need to bring on your staff? Take action to protect yourself and them. Wear personal protective gear such as gloves and masks when you are in store.
And make sure to keep a safe distance — at least 6 feet apart — when counting products. You can do it by assigning different areas where you and your staff can count products. By way of instance, you can have one team member count things in the front of the shop as you remain in the stock room.
Another alternative is to schedule your counts in changes, so you are not in the shop at exactly the exact same time. It is possible, for example, assign a worker to come in the morning, as you manage inventory responsibilities in the day.
Use devices that restrict physical contact
The fewer things or devices you touch, the better. Have only 1 device per individual when counting products. So instead of working with a clipboard plus paper and pencil, choose to use a inventory counting app like Scanner, which people can download to their phones — no additional devices required.
Also, try to limit the products that you touch. Whenever possible, choose to scan a product’s barcode without picking it up from the shelf.
10 Stock Counting Tips for Retailers
Now that we have covered inventory counting health and security amidst COVID-19, here are more general recommendations to create inventory counts a lot more effective in your business.
1. Have a physical count of stock? Consider cycle counting
Have you ever attempted cycle counting (aka partial stock-takes)? It’s the practice of partly counting merchandise on a constant basis so that you can track stock levels without interrupting store hours. Known as one of the most effective inventory counting approaches for retailers, cycle counting can be done daily or weekly (usually before the shop opens) and can free you from having to perform full inventory counts.
Philip Pravda of SuitCafe.com highly recommends this method. “I possessed four luxury menswear stores, and my method for taking physical inventory was nearly daily,” he shares.
“I’d choose modest segments of the shop, or a specific brand of shirt, suit, coat, etc.. I’d count them up with all the design numbers and dimensions. Then walk over to my computer and compare. Doing the entire shop for a small business is difficult because you’re always helping customers and definitely don’t wish to close early or for a complete day to do inventory.”
“Our shipping department employees are each assigned a couple of audits to perform every week — large volume products come up for audit considerably more often than low-volume sellers, but every item is counted at least once annually ,” he says. “We also capture problems a great deal sooner which keeps them from getting tremendous issues.”
On the other hand, if cycle counting is not your cup of tea, or if you feel that you have to do a full inventory count along with partial inventory takes (as some retailers do), the tips below should make your life easier:
2. Use inventory scanners or other types of inventory counting technologies
Traditionally, physical inventory counts are done with a pencil and paper. The staff would utilize a physical inventory count sheet to tally up the merchandise and reconcile the information in their system.
While this method can find the job done, it is highly inefficient and it requires dual entry. And of course, since physically counting stock is currently a”manual” job as it is, the last thing you need is to manually tally and record data.
If you are using a POS or stock management applications, check to determine if it gives inventory counting features you can use.
Other technologies that you should consider are:
Scanner app — Digitize the counting process with Scanner, a free mobile app which makes counting inventory a breeze.
Scanner lets you perform complete and partial stock counts together with your iPhone, iPad, or iPod Touch. Simply scan your product barcodes with your device’s camera, and the app will automatically save and record all the essential product information.
Scanner also syncs finished counts along with your Vend account, so as soon as you’re done counting, it is simple to update your inventory levels.
RFID — Want a more sophisticated tool for inventory counts? Consider RFID technology. Short for Radio Frequency Identification, RFID enables you to embed chips to the packaging of your product so that you can easily monitor their location. RFID is truly handy, not only from a loss prevention standpoint, but also in regards to keeping inventory accuracy.
Consider what Mammoth, a sporting goods store in California, will not streamline inventory counts. Rather than doing full stock counts, the business counts its high-ticket, high-shrink items each day and cycle counts via a portion of its stock with the objective of counting all its product every 2 weeks.
Mammoth also utilizes Truecount RFID applications to create reports of what they have should have on in stock.
“Truecount lets us create a comparison report based on which our computerized inventory system states we have in stock and what we could rely,” Mammoth co-owner Phil Hertzog informed the NRF. This job is performed after closure, and they reconcile their stock the next morning to search for discrepancies. If there are any gaps, Truecount software tells the employees where the lost items should be the location can be checked.
3. Pick your”counters” sensibly
Don’t assign your stock counts to just any worker. The group conducting your inventory counts should consist of experienced employees in addition to people who can offer fresh eyes.
You will want seasoned team members, since these employees are more comfortable with your policies and the positioning of unique items. However, somebody who is so used to your store or stockroom may overlook modest problems and details, so having those that are a little new to the team could be beneficial.
An alternative is to employ third-party inventory counters. This is beneficial if you do not have the in-house experience or funds for conducting the count yourself. Now, the real counting process will vary from 1 provider to another. It’s best to seek advice from your third party inventory counter and follow their procedures.
4. If you have to do a complete physical inventory count, then schedule it beforehand
The timing of your inventory counting procedure matters a good deal, so have a think about when (and what time) to program your own counts, and then aim (way) ahead.
When is a physical stock usually taken?
The question of when (and how often) you ought to run full physical inventory counts actually depends upon you. Some shops do it once a year, others run it on a bi-annual foundation, although other shops do it more frequently.
The Retail Doctor, Bob Phibbs, writes on his website that it is better to do it on the last weekend of January or at the end of July as your SKUs are potentially at their lowest during these phases.
Whatever you decide, however, you will want to settle on a date well in advance (weeks or even months before) and ensure that your employees know what is coming up. At this point, you want to take down the names of the men and women who’ll be assisting you with your physical inventory count. Be sure they can make themselves available on the decided date.
Ideally, you would not need to stop store operations, so in case you’re able to handle it, schedule your stock count after business hours. But if this is not possible, and you will want to close up shop for a day or a few hours, then make certain to provide your clients a heads up.
Alert regulars which you will be closed on a specific date, kindly notify people when they are in your store, and exhibit a sign out of your shop or at the checkout counter detailing the date and times you’re going to be shut and why.
5. Map your store
Draw up a map of your shop and stock room that illustrates where your goods are . As Phibbs notes, you need to “Sketch out the location of every stand, screen, wall, and shelf if needed.”
Doing this will give an at-a-glance perspective of your shop and make it easier for you to assign people to each section so that you can find out the best way to do the counting process (i.e. in which to begin counting, the way to move around the shop ).
Your map can also serve as a handy checklist when you are actually counting products. You can mark off the segments which have already been counted, which makes it much easier to see how much you have completed.
6. Label shelves and boxes
Don’t go in the task blind. If you are performing a physical count of your inventory, make sure you mark the shelves or boxes in your stockroom if the goods in them are not visible.
As the website Supply Chain Cowboy puts it,”When the time comes to count stock, having everything at a marked place is a must. Those loose boxes and stray boilers with no home are often the issues that come back to haunt you as you attempt to reconcile. Even in case you need to make new, temporary places for the duration of the count, then place everything in a well-marked and specified location, and leave it there.”
While you’re at it, make sure everything is where it ought to be. Walk around the store or stockroom and watch out for items that are not in their proper location. Are there any tank tops lurking in footwear section? Did someone mislabel a box of product? Make certain to fix these issues before beginning counting.
7. Consider items that are in limbo
When planning your stock counts, work out how you are going to take care of things which are in limbo. These could consist of merchandise in transit — such as outstanding orders from providers or products which have been returned. Ideally, these things should be processed and dealt with prior to doing the count to prevent any confusion in the future.
Ditto for faulty products. If you encounter damaged items before the count occurs, address them early on.
8. Orient your staff
Ensure that your staff is familiar with each the actions you took above. If you produced a map, show it to them and make sure they understand where people are assigned.
Did you alter the position of particular items or re-labeled sections and boxes? Tell them–or even better, reveal them. Take a walk together on the sales floor or stock room so that they can familiarize themselves with everything. This will make the job of actually counting and reconciling much simpler.
9. Prepare food and beverages for your staff
Water, sodas, and a couple of boxes of pizza will go a long way in keeping your employees happy and productive. Physically counting stock is a tedious process, so you need your team to remain on top of their game. Maintaining them watered helps them do precisely that.
10. Post-count: keep your stock in check
Finished counting your inventory? Take immediate measures to increase your inventory accuracy. Here’s how:
Double-check and audit your points ASAP — It is always advisable to double-check your stock numbers before upgrading your inventory levels, to be sure everything was counted properly. And the opportunity to do this is right after you finish your inventory count. The information has to be fresh in your head, so avoid postponing your stock checks and audits.
Pull up stock reports — Doing this will let you examine the data and find out what you can do to boost your company.
This task should be simple if your POS or retail management system has reporting and retail analytics capabilities. Just generate the perfect reports and examine the data for actionable insights. As an alternative, you can use a tool such as Vend’s free Excel Inventory Template to acquire the information and insights you require.
Pinpoint high-risk zones — Use your stock reports to determine high-risk zones or areas in your shops. Inform your employees about these high-risk locations and work out how you can minimize losses in these areas.
Compare multiple finished inventory count reports — After you have completed multiple counts within a time period, it is beneficial to examine these reports so that you can spot patterns. This can allow you to find out why reductions or discrepancies are happening, so it is possible to take preventative actions for the future.
Comparing past reports with present ones will also allow you to determine if your stock practices are working. Are postings falling over time or not? Whatever the situation, the only to find out is to compare the information.
If you experience disagreements take immediate action to reach the root of these difficulties. As we mentioned in our post inventory reconciliation, discrepancies may frequently be traced back to human error, poor mathematics, or missing paperwork. In such instances, you’ll want to tighten up your own processes. Document your processes and automate several actions to minimize mistakes. As an example, if you are manually entering products into your system, use a barcode scanner or CSV file instead.
From time to time, inventory discrepancies are due to more sinister explanations. You might be dealing with fraud or theft in your shop, in which case you will need to investigate and take action to prevent and stop the difficulties.
In any case, the only way to ascertain what you are dealing with is to conduct inventory counts frequently, so make it a point to remain on top of this undertaking. Keeping track of your inventory data (ideally utilizing retail reporting applications ) also helps a lot.
Whether you are managing inventory management using Excel or are using a retail solution like Vend, stock-taking is a crucial part of a running a retail shop.
Smooth and painless stocktakes do not happen by accident. Details are planned well beforehand and the goods, materials, and resources you will be using are prepared ahead. If you plan to do physical inventory counts anytime soon, make sure you complete the tasks we spoke about above. Doing this will make your life so much simpler.
Got any other tips for doing physical inventory? Tell us in the comments.
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