15 Tips to Retailers for a Successful Physical Inventory
Taking an accurate physical inventory is a critical activity. It ensures you are accounting for the financial value of your assets, assures that you are re-ordering the correct products so you do not get out of balance and it helps you to keep your business organized. Here are some tips that you can use to make your count more accurate while taking less time.
Prepare in Advance - Decide the date well in advance to give yourself enough time to prepare. Schedule time outside of normal business hours. Don’t allow yourself to start counting through the day, or customer service will suffer. If you plan to close early, post a notice to customers at least five days ahead of the date.
Make Sure to Have Enough Help - An inventory should take no more than five hours if you have enough help. Determine how many helpers you’ll need well ahead of the date and how you’ll pay them. If you are hiring temps directly, you may want to call your insurance agent to confirm that any liability for a one‐time event will be covered.
Organize your Stock – Prior to the count, visually inspect every shelf, bin and display. Organize each product by size, style or stock number and try to keep categories or merchandise together. Front all items on the shelves and consolidate your products so that you do not have multiples of the same item spread around the store unnecessarily. Having a lot of onesies and twosies or will slow down counting dramatically. Make sure not to forget to receive and process all recent shipments prior to the count.
Check Your Shelf Tags – As part of your visual inspection make sure the item on the shelf actually matches the style, color, size, description listed on the shelf tag. While your employees are supposed to count the merchandise and not the tags, they often take for granted that the tags are correct - so make sure they are correct.
Create a Store Map - Take an oversize piece of paper and make a map of your store and all the fixtures in it. Sketch out the location of every rack, display, wall, and shelf if necessary. Don’t forget the back room or storage area. The map should be used to document that each area of the store has been counted. Once an employee has counted a numbered section, they should cross it off on the map and initial it.
Train Your Employees or Helpers - It is important to train your employees before you start counting so that all employees use the same methods to count, document and verify the inventory. It can be very helpful to start by counting one section as a group to make sure everyone is on the same page. Make sure to review the first sheet of each counter to confirm that it was done correctly. If you have first time counters, pair the new person with someone who knows the store and inventory process.
Follow a Plan – Number your inventory sheets to correspond to the sections on your map. Your goal is to have lots of sections to make counting easier. To maximize efficiency and accuracy, develop a work flow for the order in which the sections on you map should be counted. For example, you can begin at the front and work counter clockwise.
Leverage Your POS System - To speed counting, enter categories from your POS system onto the counting sheets with every price in the section listed. Make sure that the correct prices (regular vs. sales) are displayed – as these will impact inventory value. A short description of the items on the counting sheet can also help speed counting.
Plan for the Unexpected - Count in pencil. Have plenty of extra blank sheets for sections that have too many price points to fit on one page or for missed sections. Anything unpriced should be pulled, brought to the counter and counted last.
Touch Every Item– When counting, employees should physically touch every item as they count it. This means shaking the boxes (you do not want to count empties), touching hangers and hanging merchandise. Do not allow employees to ‘estimate’ any quantities - as this will decrease the accuracy of the count.
Use Tags to Confirm Counts– Every SKU counted should have a tag placed on it confirming that it was counted. You can even mark the count on the tag. Try to use bright colors (such as yellow) that can easily be seen. Counting tags will enable you to quickly scan the store and identify any missed items or areas.
Stay focused– Some retailers try to turn inventories into lively events or parties. Try to avoid the temptation – as these types of distractions almost inevitably result in problems with the count. Instead, keep the music turned off and the chatter to a minimum. You will find that your count goes much faster and is more accurate. Save the party for after the count is completed.
Total Up All Sheets by Category - If practical, try to tally up the results that night so you have plenty of time to check into any inconsistencies and can clearly recall any complications with the physical count. If necessary, tallying the results can wait until the following morning.
Tie Inventory Results Back to Your POS System – Be sure to use the same diligence entering the results back into your POS system. When booking inventory adjustments, make sure you are transferring any shortages out to a dead store (such as #999) or in from store #999 so you have accurate tracking of the differences.
Take Immediate Action - Once you have these figures, make sure you use them to improve the operations of your business. With an accurate inventory, you can easily figure out what you should purchase based on what you already have in your store, your shrinkage (i.e. difference between expected and actual inventory caused by inaccurate invoices, sloppy transfers, miskeyed items and theft) and pricing strategies to move excess inventory. Be sure to use this data while it is fresh!
MicroBiz Tip of the Month: End of Year Clean-up Items
MicroBiz for Windows can help you do a physical count of your inventory in stock. Under the Inventory | Inventory Reports menu, you can select from a variety of reports to print. You can use the Inventory Audit List Report to assist you with the physical count. This report shows all products in your inventory by SKU’s and Description. There’s also a line to enter your actual count. To print the Inventory Audit List Report, click the Physical Count button, then click on Generate Report.
Import Data - You may choose to use a PDT to do your physical inventory (such as the CipherLabs 8200 hand held computer highlighted below). Once you’ve completed your inventory count, you may update your inventory by importing the data into MicroBiz. This feature can be found by going to Tools | MicroTrak | Import Data. In the MicroTrak Import Screen, you have the option to “Add to existing on hand quantity” or to “Replace on hand quantity”. For assistance with using your PDT and with importing data, please call MicroBiz Support at the number listed below.
Import New SKU’s - The Import/Export feature can be found under Management | Import/Export Data | Import New SKU’s and update Description and Prices. This new feature allows you to import new SKU’s, where as the Import Data from the MicroTrak screen only allows for updating or replacing existing SKU’s.
Sales Reports - Sales reports can be found under “Reports” – “Sales.” These reports can give you information regarding the transactions occurring during the year. The Sales Journal report will show every individual transaction processed during the year. Please note that “Invoices in Progress” and “Layaways” will be shown on the report the day that they have been finalized. The Sales Summary report will give you a breakdown of total sales done for the day. Please note that this report is based on your closeout data.
Cost of Goods - Curious on how much your products are worth? You can print the Products Cost of Goods Report by going to Reports | Cost of Goods Display. This report gives you the total number of items in your inventory, the total cost of goods and your total retail value.
Slow Moving Products - Would you like to know what products in inventory are the least popular? To view a report on these slow moving products, go to Reports | Slow Moving Products. You can print a report based the percentage or dollar amount and between date range. You can also search by Description, Style, Department or Vendor.
Returns - With the holidays just passing, you may notice an increase in returns. To do a return you simply scan the item’s barcode or load the item to the Work Screen. Next, click on the Return button or type “R” in the SKU box and then press enter. You should get a prompt to return the item to inventory. If the product is still in good condition, select “Yes” to return to inventory. If the product is damaged, you should select “No”. After making your selection, click on the F9-Print/Done button to finalize the return.
Balance Due Reports - Balance Due Reports can be found under “Customers” – Balance Due.” From here, you will be able to view your customers’ Balance Due Reports, Credit Reports, and Customer Statements. These reports are extremely helpful to keep track of money still outstanding at the end of the year.
Recalc Product Buckets - If you believe that the quantity in stock or the product history may be a little off, try recalculating your product bucket by going to Management | Reindex / Clean and Pack, etc. | Recalc Product Buckets. This feature recalculates the sales information for the products in inventory. The program goes through your database records for the last 16 months and calculates’ the sales for each product in your inventory. The sales history for a product can be viewed from the Inventory Add/Edit screen by selecting the product, and then clicking on the Hist button. MicroBiz recommends you have a proper backup before running the Recalc options.
Helpful hint: You should also recalculate the product bucket after deleting products from your inventory database.
Expedite Your Inventory Count with a Handheld Inventory Scanner
Interested in speeding up your inventory process with a handheld inventory scanner or PDT? We support the CipherLab 8200 series of hand held wireless inventory scanners. This mobile computer features low power consumption to sustain long operating hours and a compact and ergonomic design for comfort and mobility. It's feature-packed and comes with wireless connectivity and a big display. It supports several programming languages and can be customized for your operations. Plus, we have documented settings allowing you to quickly configure the CipherLabs 8200 for use with your MicroBiz retail management system.
For more information, please visit our online knowledge base at support.microbiz.com or call our sales department at (702) 749-5353. To purchase a CipherLabs 8200 PDT, please visit our online store at www.microbiz.com.
Last Chance for $250 Special Offer on Payment Processing
Through January 31, 2014, WorldPay (one of the largest core payment processors in the US) has a special offer just for MicroBiz customers. WorldPay is willing to bet $250 that it can lower your current payment processing costs. Here is how this special offering works:
Submit your two most current processing statements to WorldPay (of course, after redacting any private or confidential info)
WorldPay will review your credit card statements to see if it can lower your processing costs.
If you currently have awesome rates that WorldPay cannot match or beat, they will send you a check for $250 just for giving them the opportunity to compete.
If WorldPay offers to match or beat your current rates and you decide to open a new WorldPay account to lock in these savings, they will give you a $250 statement credit to be applied against future WorldPay processing charges and costs.
You win either way. If your rates are too low to beat – you get a $250 check mailed to you. If you open a new merchant account with WorldPay to lock these lower rates, you lower your ongoing costs and also receive a $250 statement credit. Not too shabby!
Besides price, processing through WorldPay offers other benefits:
Fully integrated with MicroBiz for Windows software (see following section for more details on the advantages of integrated processing);
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This is a limited time offer and is only valid through January 31, 2014. It is only open to MicroBiz for Windows users. MicroBiz users must have version 15 installed (will not work with older versions of MicroBiz for Windows). Additional restrictions apply. For more details on the offering, please call 866.886.6914 or email microbiz@worldpay.us.
Quote of the Month
“Quality means doing it right when no one is looking.”
– Henry Ford