Small Business Basics: 5 Steps to Simplify Your Inventory Process

When you have inventory to deal with, there are several steps that you can take to make your count go easier. Many of these steps are what might be called common sense; however, implementing them is more of a job than it appears.

Make sure that your storage area is clean

If you have items in the wrong place or open, uncountable products mixed with items that need to be tallied, it will confuse your count. Even if you are cleaning as you go, make sure that when you leave an item as counted it's easily verifiable.

Make sure that stock is properly rotated

Whatever method you are using for stock rotation, most often FIFO (First In First Out), make sure that your stock adheres to it. Have delivery dates easily displayed, and make sure that your team is aware of how to pull items and which to pull first. Even non-perishable items are subject to FIFO because buying at different times can mean changes in cost or pricing.

Divide large quantities into manageable sizes

There are methods you can use to do this effectively. First, map out your storage area making sure that it is complete. Then assign someone to count a specific area, and make sure they know they're accountable for their numbers. Don't assume that just because it's only counting that your people will immediately take to it. Taking inventory is not easy. Put your most seasoned personnel on the faster moving stock. Slower moving stock or unopened pallets can be counted in advance. Just make sure to mark them with the date so they are not counted twice.

Don't move items while counting

It can get pretty hard to track inventory if it's in constant flux. Don't remove or add items. You might have a need for companies like Extra Space Storage while you're counting so you can store excess items. Ship everything that can be shipped prior to your count. Don't move items from one place to another while counting because this can cause things to be missed or double counted. Find a way to mark those items you have already counted as you go, so you can discern what you have left more efficiently.

Audit your inventory immediately

An instant audit will serve to check up on your counters, and make sure that the numbers they're getting are reliable. Whether it's due to the error in the tally, or missing and overage in stock, if your count comes up wrong, you'll need to find out why. When you do get discrepancies, get a written report that clearly shows what you thought you had and what you actually have. When you finally finish, examine your inventory counting process with your personnel. Look for ways to improve those parts of the count that are harder, and take note of methods that are successful. Keep everyone in the loop on inventory pulling procedures to avoid persistent inventory problems.