Many times a physical count is required by a tax or accounting agency, but it is a best practice to perform one at least once a year so you have an accurate valuation of your business. Performing a physical count is a stressful job and requires a lot of work. Since a physical count is typically performed once a year, we forget all the steps that are required to be successful. The good thing is, we have created an outline for you so you can get a head start. And once you’re done with it, you’ll have the peace of mind knowing that your inventory management system accurately matches what you physically have in the store! The count can be done manually or with a barcode scanner. Here are some tips we’ve gathered over the years:
1. Assign someone the job of count master. It is their job to organize and supervise the physical count.
2. Make a map of your store. Try to keep the areas small enough to count in under one hour.
3. Get some Post-It notes and write the map coordinates of each location from the map.
4. Post all transactions in your inventory management system. A few of these transactions are inventory adjustments, point of sale, receiving, return to vendor, purchase adjustments, and inventory transfers.
5. Print an inventory valuation report and save it.
6. Make a few trial runs so you are comfortable with the process and are getting the results you expect.
7. Make a chart for the count such as the one below:
8. Fill out the chart as you go. Most mistakes are made by double importing a file or forgetting one.
9. As team members count an area, give them the Post-It note and the Post-It note travel through the process. This way you will know if an area has been counted.
10. Before you post, review the worksheets and check for accuracy. Make changes if necessary.
11. Make a copy of the physical transaction file after completing the physical count.
12. Be careful when you post if you don’t know what the results will be of the options you choose. Do not guess!
13. Print another inventory valuation report and save it. If you would like assistance with a physical count of your inventory, we’re happy to help! Just give us a call at 952-544-6463 or send us an email at email@example.com and we’ll guide you through the process.