Physical Inventory Count Checklist: Fill & Download for Free

Stock management is the part of supply chain management that aims to always have the right products in the right quantity for sale, at the right time. When done effectively, businesses reduce the costs of carrying excess inventory while maximizing sales. Good inventory management can help you track your inventory in real time to streamline this process.By effectively managing your inventory you can have the right products in the right quantity on hand and avoid products being out of stock and funds being tied up in excess stock. You can also ensure your products are sold in time to avoid spoilage or obsolescence, or spending too much money on stock that’s taking up space in a warehouse or stockroom.Stock management techniques and best practices for small business. Here are some of the techniques that many small businesses use to manage inventory:Fine-tune your forecasting - Accurate forecasting is vital. Your projected sales calculations should be based on factors such as historical sales figures (if you sell with Square, look to your online Dashboard for this info), market trends, predicted growth and the economy, promotions, marketing efforts, etc.Use the FIFO approach (first in, first out) - Goods should be sold in the same chronological order as they were purchased or created. This is especially important for perishable products like food, flowers, and makeup. A bar owner, for example, has to be cognizant of the materials behind the bar and apply FIFO methods to improve bar inventory. It’s also a good idea for nonperishable goods since items sitting around for too long might become damaged, or otherwise out of date and unsellable. The best way to apply FIFO in a storeroom or warehouse is to add new items from the back so the older products are at the front.Identify low-turn stock - If you have stock that hasn’t sold at all in the last six to 12 months, it’s probably time to stop stocking that item. You might also consider different strategies for getting rid of that stock — like a special discount or promotion — since excess stock wastes both your space and capital.Audit your stock - Even with good inventory management software, periodically you still need to actually count your inventory to make sure what you have in stock matches what you think you have. Businesses use different techniques, including an annual, year-end physical inventory that counts every single item and ongoing spot-checking, which can be most useful for products that are moving fast or have stocking issues.Use cloud-based inventory management software - Look for software with real-time sales analytics. Square’s software connects directly to your point of sale, so your stock levels are automatically adjusted every time you make a sale. Receive daily stock alert emails so you always know which items are low or out of stock so you can order more in time.Track your stock levels at all times - Have a solid system in place for tracking your stock levels, prioritizing the most expensive products. Effective software saves you time and money by doing much of the heavy lifting for you.Reduce equipment repair times - Essential machinery isn’t always in working order, so it’s important to manage those assets. A broken piece of machinery can be costly. Monitoring your machinery and its parts is crucial to understanding its life cycle, so you can be prepared before issues arise.Don’t forget quality control - No matter your specialty, it’s important to ensure that all your products look great and are working well. It could be as simple as having employees do a quick examination during stock audits that includes a checklist for signs of damage and correct product labeling.Hire a stock controller - Stock control is used to show the amount of inventory you have at a given time and applies to all items from raw materials to finished goods. If you have a lot of inventory, you might need one person who is responsible for it. A stock controller processes all purchase orders, receives deliveries, and makes sure that everything coming in matches what was ordered.Remember your ABCs - Many businesses find it helpful to have tighter controls over higher-value items by grouping inventory items into A, B, and C categories.Consider drop shipping - If your business adopts drop shipping methods, you can sell products without actually holding the inventory yourself. Instead, a wholesaler or manufacturer is responsible for carrying the inventory and shipping the products when a consumer buys from your store. That way, you don’t worry about inventory holding, storage, or fulfillment. Many owners who start an online store adopt drop shipping methods, but this supply chain fulfillment strategy can be adopted by many types of businesses across all industries.

I presume you are trying to get your accounting records in order for a year end close.In accounting terms, in principle, if you beat up your balance sheet, income will fall out. That means if your balance sheet is correct, your income statement (in terms of net income) will be correct.This means:reconciling all of your bank accountsperforming a physical count of goods on handensuring sales cutoffs and inventory receiving is accurate (i.e. tracing the last transactions of the year (last couple of day's of activity) into your general ledger),ensuring all invoices for services rendered and goods received prior to year end have been recordedexamining accruals and making estimates for anticipated expenses yet to be invoicedensuring all fixed assets on your sub ledger are still in existence and recording disposition entries for anything you cannot findexamining obsolete goods and recording reserves for the difference between cost and market valueshaving supporting, defendable documentation for each and every balance sheet account and having your senior accounting official (CFO/Controller) sign off on themexamining accounts receivable and assessing the probability of collection, making entries for reserves for bad debtssearch for unrecorded liabilities by examining your disbursements subsequent to year and and looking at the invoice dates and the periods in which expenses were recordedsending a memo to all department heads to have them approve and submit invoices by a reasonable cutoff datesend out 1099s (to vendors) and W-2s (to employees)year end payroll adjustmentsThe above conceptually describes the basics and should not be construed as an all-inclusive checklist, which I would probably write 100 more things, if I had the time.

Smart Tracking and Accurate CalculationInaccurate calculation leads to wrong ways of managing inventory. To fix it right, work on inventory tracking and supply chain management. Outsourcing the latter can burn a hole in a small business’s wallet. Inventory solutions like rent-a-space, warehousing, etc are hardly free. So make sure your projections are accurate.When making a projection, don’t simply consider how much you can stuff in the facility. Consider how much you’ve sold in the previous month and the month before. If you have been selling 50 merchandise (give or take a few) every month for the last couple of months, project a number close to 50. Do consider seasonal uptick though.As for inventory tracking, eliminate miscounts at all cost. Mistakes are quite common during order-fulfillment. Use a barcode scanner and electronic data interchange (EDI) so that not a single error occurs. Remember, spending too much on inventory management can reduce your profit margin if your calculation and tracking methods are flawed.Discriminate Between ItemsSome of the items are best-sellers while some are slow-moving. As a retailer, you need to discriminate between them and readjust your inventory management strategies accordingly. For example, an item that moves fast is likely to run out of stock. Hence, its procurement and availability is a top priority. Do bear that in mind when you devise a space allocation strategy for your inventory.Slow-moving items occupy the shelves for a long period of time. Such products often eat up space, because of which the supply for fast-moving items fails to match up with the demand. Large businesses use pricey software solutions which can figure out how much loss the retailer is making due to these slow-moving products. Small businesses, on the other hand, must instruct suppliers to deliver freshly produced goods.Set Your PrioritiesNot all items matter equally. Some items matter more than other items – that includes the bestsellers and the upcoming seasonal top picks. As a rule of thumb, 80% of consumer demand is generated by 20% of all items. Constantly review the in-stock position of those items because these are your priorities.Experts believe, among the rest 80% inventory items, 30% make up the 10% of customer’s pick. Stocking these items should be the next priority for the retailer. The slowest-moving items make up the rest 10% consumer demands. Hence, those items should be at the end of the priority checklist.Most retailers use automated solutions which assist them in several ways. Alongside, automation can make physical counts of inventory super easy. Smart retailers keep a manual track using a spreadsheet. I advise them to use Google Spreadsheet because it’s a cloud. There is software like Sage 50, Peachtree, Quickbook, etc that come with spreadsheet and accounting solutions.Quick Order ProcessingSlow order processing can clutter inventory management. Install a state-of-the-art order management system to monitor everything related to order processing, starting from the placement of order to shipping the item to the exact street address of customers.The benefit of quick order processing is it eliminates the need to send items back to the warehouse. Besides, it keeps retailers posted about their current inventory status. There’s a proven method to make order processing effective – playing the intermediate between the manufacturer and the consumers.Feel free to email me at [email protected] if you would like more information but this is a brief overview. Hope it helps!Sammy Singh, Forbes FinanceLinkedinFacebookTwitterCrunchbase