Retail Business Success: Importance of Inventory Management & How To Do It

There are many different aspects to being a retailer. Arguably, one of the most tedious jobs is undertaking physical inventory counts. Physical inventory counts are often a long, arduous process that, in some cases, can mean a temporary closure of your store. Nevertheless, they are unavoidable and crucial to the success of your business. How else are you going to know what stock you have, what stock needs shifting and what is selling so well that you need to keep stock levels consistent?

Physical inventory counts may not be fun, but there are ways to streamline the process and make it much more efficient so that you can get on with what’s important – selling your stock. Here’s what you need to know about physical inventory counts and our top tips for making yours as simple and straightforward as possible.

Physical inventory counts are often a long, arduous process that, in some cases, can mean a temporary closure of your store. Nevertheless, they are unavoidable and crucial to the success of your business. How else are you going to know what stock you have, what stock needs shifting and what is selling so well that you need to keep stock levels consistent?

Why are physical inventory counts so important?

There are multiple reasons for carrying out physical inventory counts. These include:

Managing your stock levels

Unsurprisingly, one of the main purposes of a physical inventory count is to help you effectively manage your stock levels. If you know what’s selling well, you can make sure that you have plenty of the product in stock so that you don’t disappoint customers and so you can maximize your sales. You can also determine what isn’t selling well so that you know not to order those items again in the future.

Prediction of future sales

Anticipating demand is a very valuable skill and will enable you to capitalize on future sales. If your business experiences seasonal fluctuations, regular inventory counts can provide important information that you can refer to in order to predict future sales. For example, you can check out last year’s pre and post-Christmas inventories to see what to stock up on and how much to buy.

Tracking your assets

Stock counts towards your total business assets, and there may be occasions whereby you need to show your total business value. If this happens, you will need to include a reasonable estimation of your current stock. Physical inventory counts are also important for insurance should you ever need to make a claim.

Protect yourself against theft

Nobody likes to think that any of their employees would be dishonest, but the truth is that it does happen, and it is particularly tempting when staff know that you are a bit slapdash about keeping track of your inventory. Regular checks and a rigorous system for checking can dissuade theft and enable you to take action should you suspect it happening.

Top tips for physical inventory counts

You’ll be pleased to know that there are some things that you can do to streamline the physical inventory process without compromising on accuracy. Here are our top tips for keeping control of your stock.

Schedule your counts in advance

For most stores, there are certain periods of the year where they are busier than others. Scheduling your inventory counts into these quiet times can minimize the disruption to your sales, particularly if you need to shut the store down for the duration of the process.

Choose your inventory-takers carefully

It may not seem like a particularly difficult job, but this doesn’t mean that you should ask just anyone to take your store’s inventory. Close attention to detail is essential, and experience in stock-takes is beneficial. Many business owners choose to combine a seasoned staff member with someone newer and who has a fresh set of eyes, as this can obtain the most accurate data.

Don’t forget items that are in transit

It’s all very well taking count of the items in your store, but it’s important not to forget those that aren’t in the building. This can include stock that you have purchased but you are waiting on delivery of, items that may be on loan and assets such as company vehicles. All of these form part of your business’s overall inventory.

Have a system planned out before you start

The most efficient and accurate inventory counts are those that are meticulously planned. By breaking down your store into physical locations, you can assign areas to staff and mark them off when complete.

Train your team

An inventory is only as reliable as the people who are taking it. Make sure your team know the process for counting, including how they record their figures and how they mark off the items counted. This ensures that nothing gets missed and the figures are as accurate as possible. If you need to, schedule a day to train your team on the best way to perform this task.

Consider cycle stock counts

This is where your team are assigned small areas to stock take on a regular, but continuous basis. This is often the preferred format of businesses where it simply isn’t practical to shut down the store for a big annual or semi-annual count.

Keep your staff happy

As we know, physical inventory counts can be mentally and physically challenging. When you value your employees, you will want to make the process as painless as possible for them. Regular breaks, food and drink will help to keep their minds and bodies sharp.

Invest in a solution that can track your inventory for you

Finally, one of the ways to keep on top of your inventory is to invest in a solution that can do unlock the potential of your inventory on your behalf. At HIKE, our POS software comes fully integrated with inventory support.

Our inventory application can:

• Handle limitless amounts of inventory
• Enable you to carry out partial or full inventory counts, even actioning multiple partial counts at once
• Enable you to stock by variant, including size, colour, material and more
• Be used in conjunction with barcodes, including separate barcodes for variations in products.
• Centralize your inventory across multiple stock locations
• Apply price and product information changes across all locations from a centralized point
• Track inventory purchases
• Let you set custom reorder points for each individual product with automated reminders
• Enable you to transfer stock between locations

Let SimbaPOS unlock the power of your inventory. Contact us today to find out more