• Inventory Basics
• How to name your inventory locations
• How to label your inventory locations
• How to describe your inventory items
• How to create good item numbers
• Tips for creating unit of measure names
• How to count your inventory items
• Glossary of terms

A Step-by-Step Guide to Performing a Count of your Entire Stock

The count we’re concerned with here is your initial count.  Maybe you’re counting your stock levels for the first time, or perhaps you don’t trust your current numbers and want to start ‘clean’. Whatever the reason, if you’re going to get a complete count of your stock, this document will provide help and insight.  If you already have a trusted picture of your current inventory levels and don’t feel the need to visit this subject, than you can certainly skip this section.  If you're using Clearly Inventory, this section will explain how to get the information you will need to load in the "current inventory" table.

Why are you counting your inventory?

You probably already have a good reason for counting your inventory.  But this is a good time to consider other benefits to keeping track of your inventory, and the reasons for tracking it. The following list of reasons is meant to remind you of common reasons for tracking inventory, as well as stimulate your imagination as you think about why you're doing this. 

Asset Tracking and Valuation

Most businesses have a large part of their capital tied up in assets.  These assets may be things like buildings, automobiles, machinery, furniture, fixtures, equipment, computers, etc…  Often businesses need to know the value of these assets along with other information as to where they are, when they were purchased, for how much, etc..   Your accountant may need this information, banks, insurance companies, partners, people in operations, and management.  You can’t get the best use of your assets if you only have a vague idea of what they are, where they are, and what they cost.  This is as good a time as any to count your longer term assets.

Why are you counting your inventory?

If you’ve gotten this far, you probably already have a good reason for counting your inventory.  But this is a good time to consider other benefits to keeping track of your inventory, and the reasons for tracking it.  So, in no particular order, here are some things to think about.

Managing Stock Levels

Can you save money while still delivering your products on time?  Are you chronically over ordering certain items?  Do you need to free up space for other products?  If these business decisions are important to you, then you will need to have a count of the items that may be involved.

Anticipating Demand

If you are in a business or enterprise that experience demand changes based on the seasons, time of year, holidays, days of the week, etc… Then you will want to have an accurate count of those items that are most affected by these factors.  You’ll want to know how much of an item you used last time, and how much was left over so you can decide how much to buy this time.

Shrinkage, Theft, & Loss control

If people know that no one’s keeping track of things, they will tend toward carelessness at best, and outright theft at worst.   When an organization demonstrates through actions that an accounting of its goods and equipment is a regular part of their operations, people will know that someone’s paying attention, and they had better do so as well.

Insurance

If disaster strikes how quickly will you be able to account for all of your stock and equipment?  And if you keep track of these things, where are those records kept?  On site?  When considering why your counting your stuff, ask yourself what you’d want to know if everything was gone tomorrow.  What would your insurance company want to know? 

Accounting

Do you need to provide your accountant with a value of your current inventory at the end of every fiscal year?  Will you need to at some point in the future?  A solid record of your inventory can make an annual chore that people dread into a task that can be completed in seconds.  And if something’s easy to do, chances are, it will get done.

Location Decisions

Will you want to know where the most frequently accessed items are located?  Will you want to know the locations of your most valuable stock?  Lots of small businesses set up their storage locations by feel, or sometimes by habit.  Once you get in the practice of tracking your inventory, you’ll be able to make better decisions on the best locations for your stock. 

 

To Be Continued....