Performing regular inventory counts is a necessity and must be part of your regular daily operations. Accurate counts not only ensure better reporting, cleaner bookkeeping, but most importantly proper management of your inventory. This process is even more significant if you're operating in a state using Metrc, as performing and reporting inventory counts is a monthly compliance requirement.
Full inventory counts can require a lot of time so becoming more efficient is key to reducing labor hours and expenses as well as mistakes and staying on top of compliance. Daily cycle counts can help alleviate some of the burden by taking a section or a product each day until you have completed a full count. Daily cycle counts will also help you understand and track your velocity with products and also enable you to catch shortages and trace why they occur more quickly and accurately.
Every time you re-stock you should be doing cycle counts. Should you encounter shortages during your counts, you have the ability to look for patterns, and narrow down likely occurrences. Regular cycle counts provide a firm date so that you have a much smaller window to investigate should you find discrepancies. Tip: A best practice is to keep two batches of a product on the shelf/floor. If you sell seven items from a batch throughout the day you are not restocking on the remaining 3 items. You sell the remaining three then restock with a new batch which is a whole or complete batch.
Spot Checks are crucial. If you prefer to do cycle counting on the first and last day of month, make sure you are spot checking frequently and randomly. Do not get tied to specific dates, be as random as possible and spot check different categories and sections each time. This also increases your ability to catch fraudulent activity.
Have a discount strategy related to moving product before it expires or when it doesn't move as expected. Tip: Adding expiration dates on your inventory cards generates an accurate report in AskTreez Inventory Aging Report.
More Easy Tips to Put into Practice Right Now:
- Clean before you count. Organize everything.
- Do a section or category each day.
- Cycle counts for promotional items are critical if you cannot do cycle counts daily.
- Clear out your POS return location daily so you can track down returns or any issues that may have occurred before too much time has passed, and you are unable to track down why certain items are in the Return/Destroy location.
- Clearing saved sales ensures that you can start fresh the following business day and not be distracted by or potentially miscount sales of product that were never completed. It also releases inventory to a sellable state that would otherwise be reserved and could skew your cycle count.
- Turn off your eComm when counting so you don’t inadvertently miss things.
- Enforce product scanning. This may seem cumbersome at first, but it actually reduces clerical errors which then cascades to theft opportunities.
- Organize your products by type in your back of house for faster, more thorough counts.
- Reducing SKUs can also reduce your inventory touches and labor costs as well as prevent theft and fraud.
For CA: Understand the difference between product and accessories, especially with the new CA tax law changes in 2023 as this can result in astronomical savings.