Whether you have just launched your business or have been in the industry for years, taking a complete end-of-year inventory count is unlikely to be on your favorite to-do list. If you’re responsible for managing inventory at your organization, it can be nerve-racking to think about how much counting you’ll need to do to ensure your numbers are accurate for bookkeeping by year-end.
Many companies dread the process of taking inventory counts, even though they know it is fundamentally important. Fortunately, ScanForce warehouse management helps Sage users track inventory by optimizing workflows and making cycle counting easy.
With the vast tools and inventory tracking systems available today, most companies can achieve accurate inventory counts without undergoing a complete physical inventory at the end of the year. Managing your physical inventory counts is easier if you use inventory management software to help you capture data and quickly evaluate your results.
ScanForce can help you manage your inventory counts by:
- Reducing count times by up to 80%
- Eliminating manual data entry
- Scanning barcodes to capture item details
- Seamlessly importing data to Sage Physical Count Entry
- Accurately sharing data to leverage Variance Reporting in Sage
As the new year begins – and the memory of your EOY inventory count is still fresh in your mind– make a resolution that the process will be easier and more automated in the next cycle.
Why You Need to Get Inventory Counts Right
Lack of accurate inventory counts and inventory distortion led to $1.1 trillion in worldwide total lost revenue. Inventory data enables better supply and demand forecasting, recognizing patterns that affect sales, and ordering with minimal waste – and it ultimately impacts customer service and satisfaction.
Here are a few more reasons why accurate inventory is important for businesses:
- Keeping a close watch on inventory allows a business to minimize warehouse space and control costs, increasing profitability.
- Up-to-date inventory data reduces discrepancies between physical and inventory counts. Stock outs will cost your business revenues and, possibly, loyal customers.
- Inventory counts show shrinkage and can help pinpoint sources of loss, and keeping a close watch on inventory can discourage employee theft.
- Inventory count is more than a matter of compliance with generally accepted accounting principles (GAAP) and tax rules. It provides valuable insight into improving operational efficiency and helps the management make informed business decisions.
The last thing you want to do is assume that you have enough inventory stock available to fulfill a crucial sales order, only to find out that the inventory shown in the system is nowhere to be found. It is even worse when you have more items than needed and end up selling them off at the cost price or a loss.
Furthermore, an accurate account of end-of-year inventory:
- Impacts your bottom line when financial reporting is due
- Shows the value of the stock at the end of the accounting year
- Enables a tax write-off If inventory is obsolete or if the value is less than the purchase price.
- Points you to losses or shrinkage, which can be accounted for in tax calculations.
Inventory Cycle Count vs. Physical Count: Which is better for your business?
If you have traditionally relied on physical inventory counts at the end of the year, you know they are labor-intensive and time-consuming – your inventory team granularly counts each part, item or product.
Businesses often suspend normal business operations, schedule additional hours or overtime to complete a physical count. A comprehensive and accurate physical count of inventory items can sometimes take days or even weeks. Physical inventory counts also:
- Disrupt operations annually
- May be inaccurate if inventory counters are not be familiar with inventory, resulting in recording and counting error
- Time-consuming and often require temporary help and overtime to complete
ScanForce has innovative software solutions for Sage 100 and Sage Intacct ERP users that want to leverage barcode and mobile technology to automate processes such as physical inventory and other tasks in the warehouse.
Many companies typically divide their inventory into cycles to make counting easier – instead of counting everything all at once, inventory cycle count breaks the process down into manageable segments. Businesses perform counts of high moving goods more frequently, moderate moving products less frequently, while slow-moving goods perhaps only annually.
Some companies delegate cycle counting to specific staff to ensure a continuous and hitch-free counting process. Overall, cycle counting helps identify problems quickly and ensures the accuracy of the counting process.
Inventory cycle counts also provide businesses with:
- Ability to identify and correct inventory recording errors more frequently (fewer variances)
- Inventory counting without interruptions to normal operations
- Lower demand for labor and lower costs for inventory counts
- Less expensive and help you save money to invest in other aspects of your business
- Insights throughout the year to help you understand business performance
ScanForce’s warehouse management software makes cycle count seamless by helping you streamline operations, improve productivity, increase visibility, meet demand, and reduce expenses.
The Best Way to Manage End-of-Year Inventory Counts
Regardless of whether your company relies on physical counts, cycle counts, or both, accurate end-of-year inventory doesn’t just happen. You need a well-planned strategy backed by effective and reliable inventory systems as well as a team trained in your processes, how to evaluate errors, reconciling, and updating records.
Want to learn more about inventory counting, best inventory practices, and how inventory management software can make your warehouse operations more efficient? Contact us today to learn how ScanForce can move your business into the future with the latest innovative warehouse management solutions and unmatched customer support!