How To Keep Track Of Inventory
Failure to keep track of your inventory is basically the same as guaranteeing failure of your business. As much as we want to be able to trust our customers and our employees, the sad fact remains that small business owners simply cannot afford to have their merchandise walking out the door, unpaid for. For this reason, business owners must have an effective way to keep track of inventory.
There are other reasons that a good way to track inventory is necessary. A good inventory tracking system will allow you to easily see what merchandise is in stock, what is on order, and what needs to be ordered. It will also show you what items move quickly, and what items need to be marked down, or promoted more heavily.
There are many different methods for tracking inventory. You can set up your own system, or you can ask your accountant to set up a workable system for you. The Tag System is one of the easiest systems to use. Simply use a record book, and list all of the inventory that you have on hand. Put a special tag, with a unique tracking number on each piece of merchandise, and record that tracking number in the book. When the merchandise is sold, remove the tag, and stick it next to its entry in your inventory record book. At least once a month, go through and check your merchandise. Make sure you have that tag for all the merchandise that you no longer have.
Another manual method of keeping up with your inventory is to compare sales receipts to delivery receipts. Then, you simply check the inventory that you still have. If it is on the delivery receipt, there is no sales receipt, and the inventory is no longer in the store, it is missing.
The inventory tracking systems that require the least amount of work to manage, however, are inventory control software packages. Some inventory tracking software packages are very plain and simple, while others do things you didn't even imagine needed to be done. Setting them up takes the greatest amount of time, but after that, they are fairly easy to maintain.
Point of sale (POS) systems can also be used to track inventory. These systems record each sale as it happens, which allows your inventory records to constantly be up-to-date. You can print reports - daily, weekly, or monthly - to compare your sales to your stock.
The use of barcodes is another way to keep track of inventory. This works with computer software, and tends to make inventory checks go more quickly. A barcode is placed on each item in your inventory, and when you check your inventory, you simply scan the barcode with a handheld scanner.
If you find, through your inventory tracking system, that inventory is missing, you will need to find out why. You may want to consider installing video cameras, both in the customer areas, as well as in employee only areas, such as storerooms. If inventory is missing, discuss it with your accountant right away. Sometimes, evidence of what became of missing inventory will appear in the financial paperwork.
Don't limit the inventory that you are tracking to just merchandise that you sell. Be sure to include all office supplies as well, including cleaning supplies. These items cost you money to replace, and if you have to replace them more often than necessary, you will be losing money quickly.
Make it a habit to check your inventory often, but don't check inventory on a set schedule. Employees and suppliers can easily learn your inventory tracking schedule, which will make it harder for you to catch them if they are stealing. Let your inventory checks be a surprise to everybody. Work with your accountant to find the most effective form of inventory tracking for your specific business.
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