Are you attempting to keep up with inventory levels in your business, but not quite sure where to start? If so, you’re not alone! Businesses in the e-commerce industry need a system for tracking inventory—and physical inventory counts can certainly help. In this post, we’ll explore what a physical inventory count is, why it’s important for businesses like yours, and how to successfully execute them
What Is a Physical Inventory Count?
A physical inventory count might sound pretty daunting, but in reality, it’s just a fancy term for counting up all the products and goods your business has on hand. Conducting a physical inventory is essential because it helps you to have an accurate account of what’s in stock, which directly impacts your business’s financial health.
When you count each item on the shelves or in the warehouse, you’re clearing up any discrepancies that may have occurred through human error, theft, or even misplaced items.
Why Is Conducting a Physical Inventory Count Important?
Conducting a physical inventory count plays a crucial role in maintaining a well-balanced and efficient business. Here’s why:
- Checks and Balances Inventory Levels. A physical inventory count ensures that a company’s inventory levels are in check, preventing overstocking or shortages that can harm sales and customer satisfaction.
- Manages or Monitors Theft. Regularly monitoring inventory can help identify potential theft, allowing businesses to implement necessary measures to protect their assets.
- Creates an Accurate Budget. By having an accurate view of current stock, companies can create a more precise budget that helps control expenditure and optimize cash flow.
- Reports Accurate Earnings. A proper inventory count directly affects a company’s financial statements by ensuring accurate earnings are reported. This, in turn, enables businesses to make informed decisions for future growth and expansion.
What Is the Process of Physical Inventory Counting?
With a bit of organization and teamwork, a physical inventory count can be a smooth and enlightening process. Here are some steps to follow:
- Determine what items will be included in the count. This can be done by looking at the company’s records to see which items have been sold in the past year and which items are still in stock.
- Create a count sheet that includes all of the items that will be counted. The count sheet should include the item number, description, and quantity.
- Physically count each of the items on the sheet. This can be done by a team of people or by one person if the inventory is small.
- Reconcile the count with the company’s records. It’s important to compare the quantities on the count sheet with the quantities in the company’s records.
- Investigate any all discrepancies. If there are any discrepancies between the count and the company’s records, they should be investigated to determine where the error occurred.
- Update the company records. Once all of the discrepancies have been resolved, the next step is to update the company’s records to reflect the new quantities.
- Generate a report that includes all of the information from the inventory count. The report should include a summary of the results as well as any discrepancies that were found.
Choose APS Fulfillment, Inc. for Your Inventory Management
If you’re looking for a top-tier 3PL provider that also features industry-leading real-time inventory tracking software, look no further than APS Fulfillment, Inc.
We offer full-service e-commerce fulfillment out of Miami that includes state-of-the-art warehouse management software (Extensiv). Get in touch with us by calling (954) 582-7450 or email [email protected] and one of our consultants will tailor a fulfillment plan designed to grow your business.
