Physical inventory counting is an activity that retailers tend to put off. Why? Because counting all the items in the store is both tedious and time-consuming.
To find the time to conduct inventory counts, many people work after hours or temporarily close their store. Neither solution is ideal. But while it’s never a great idea, conducting physical inventory counts is necessary to maintain inventory accuracy, reduce inventory shrinkage, and ensure you have enough inventory to meet demand throughout the year. Here’s what physical inventory counts are.
This article answers the following questions:
What is physical inventory of stock?
What is cycle counting?
Importance of Stock Inventory
7 Tips for Ensuring Physical Inventory Accuracy
Correct any inventory discrepancies
Checks to be carried out after the inventory of stocks
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What is physical inventory of stock?
A physical inventory count (also called a comprehensive inventory count) is the counting of all products in the store. Physical inventory counts are typically performed by a designated employee (or team of employees, depending on the amount of inventory present) who will count the inventory levels of each item on the sales floor and in the stockroom.
The inventory manager then manually records the stock levels of each item, either by recording them on paper or electronically using an Excel spreadsheet for inventory management. Physical inventory counts are time-consuming, which is why most retailers only conduct them once a year.
To maintain accurate inventory levels without having to go through an exhaustive physical inventory, many retailers perform what is called a cycle count.
What is cycle counting?
Cycle counting (also called partial inventory) involves counting selected segments of your inventory on an ongoing basis. Counting smaller amounts of inventory each time allows retailers to maintain accurate inventory levels at all times, without requiring additional labor hours or interruptions to business hours.
