One of the biggest challenges on the retail industry is – maintaining inventory accuracy. Amidst stock movement, shrinkage, errors, losses and risks, losing track of your inventory is easy. Although there are automatic systems that promise accuracy, numerical data on the system and actual numbers may vary. Therefore, physical verification of store and warehouse is crucial for inventory control in the retail industry.
Ideally, full inventory count should be done twice a year. If that is not viable for you, you must physically take count of every single product in your store at least once a year to update your records. Physical verification of store and warehouse also helps you to identify and set off any difference in actual inventory count and the one in books.
Full inventory count is labor intensive and time-consuming. It also blocks the operation hours of your business which might upset your customers. It is not practical for certain retail businesses to do a complete count at once. If your retail business cannot conduct a complete physical counting at one go, cycle counting is a good alternative for you.
An Introduction to Cycle Counting
Cycle counting is the process that is used to count products or goods partially. As the goods are all the products are not counted at once, you have to count on a continuous basis. If you think that your inventory will not be accurate, you are wrong. Why? This counting method is designed to keep you at the top of stock levels without interrupting your regular business hours.
Having discussed cycle counting, let’s discuss how you can implement it effectively in your retail business.
Counting Schedule
When you are implementing cycle counting, you count only small portions of your inventory at a time. To make it successful, you need to plan how and when you are going to count goods. You must have a detailed roadmap of items to be counted. Here are a few ways you can do so:
ABC Method
As a leading retail expert, we recommend using ABC method to break all the items into portions depending on their priority. For this, you will have to list down your product based on value and start your counting the most valuable items more frequently. Now, make a sequence of your items based on their priority.
NOTE: Inventory Control and Management Tips for Apparel Industry
Organizing the Store
Organizing your store will help you in making your store operations systematic. If your products are out of places or are not labelled, they can easily go missing. The key to cycle counting is keeping things organized & systematic. A store or a warehouse that has all the goods arranged into sections & segments is easy to count and maintain.
Take Note of Pending Transactions or Tasks
If there are any open transactions, you must close it before starting to count. All transfers & purchase orders must be recorded prior to counting. Similarly, all completed customer orders must be invoiced & closed.
Start Count
With your records and physical products in place, the counting starts. The focus must be on counting, double-checking data and adhering to your system.
Post Counting
Once the counting has ended, you must review, determine, adjust and take actions as per the requirement. In the case of big discrepancies, you will have to seek deeper to identify the causes.
Cycle counting helps in physical verification of products and also helps in maintaining inventory accuracy. VGNC offer comprehensive physical verification services in Delhi NCR. We help you to run your store successfully & efficiently.
NOTE: Apparel Industry Internal Audit: Technical Guide by VGNC
