Don’t Know What You’ve Got Until It’s Gone

Inventory accuracy is absolutely critical to maximizing sales and customer satisfaction. In the most basic of terms, if you do not have product, you cannot make a sale. If you cannot make a sale, your customer will be dissatisfied and will go somewhere else to make their purchase.

There are two kinds of inventory tracking and processes: Periodic and perpetual inventories.

A periodic inventory is one where a business takes an inventory on an infrequent basis. It might be every six months, or even annually. At that time, all of the current merchandise/ assets are accounted for. Inventory numbers are then based off of the previous inventory.

Thanks to the accessibility of computers and other digital tools, perpetual inventory is more common. It tracks each movement that the inventory takes from receipt of the product, to sales, to returns. This allows for much more immediate reaction to stock levels, customer satisfaction, and theft concerns. Inventory levels can be determined immediately through a spot check called a cycle count.

A cycle count is an informal count of a specific item of merchandise. Say you are gearing up for a sale and want to know if you have enough merchandise to satisfy the demands of the sale. You can look at your perpetual inventory system and see “item X” should have a quantity of 10. You go throughout the store and look to find all 10 pieces of inventory. After looking on the sales floor, stock rooms, and wrap stands you find all 10 pieces and know your inventory on hand is accurate.

If you can only find 5 of the item, you would start by ordering in more of the product to satisfy your upcoming sale. Next you would want to investigate why you are missing 5 of “item X”. Did they break and get thrown into the garbage unaccounted for? Were they stolen? Is this a shipment from a vendor that is in transit? Did the vendor make a paperwork error and over charge you?

By upgrading your inventory systems to a perpetual inventory you can react faster to such shortages and then quickly resolve the losses.  You still want to have a periodic inventory, at a minimum once a year, to ensure your inventory is accurate. Cycle counts are good to spot check items, but simply cannot be done for the thousands of SKUs that most businesses carry on any given day.

Call us today at 1-770-426-0547 if you would like help fixing your loss Prevention problems.

Sell More, Lose Less!