A physical inventory count is the practice of counting your store products in person. The process typically involves a retail staff member (or team of workers) going through the stock room or shelves and counting each item. The data is then recorded using pen and paper or electronically.
The objective of a physical stock count is to audit a store’s inventory and ensure that the stock data in the inventory database matches the inventory that is actually in the store.
Below is a step-by-step guide on how to perform physical stock count:
Step 1 - Schedule it
You can’t conduct a physical inventory count during normal business hours, as stock levels will be in flux. Not to mention, you won’t be able to serve your customers when you’re busy counting items in the back.
It’s best to set aside some time outside your usual store hours to complete this task. If this isn’t possible, you may have close up early on the day that you’re going to conduct your inventory count.
Step 2 - Prepare stock-taking materials and procedures
Prepare the materials you need to count your products. Ideally, you’ll want to use a digital tool or app rather than a pen and paper, as the latter opens up room for human error. In addition to stock counting tools, we recommend that you prepare a map of your store or stock room that details where products are located. This will help you plan out how you’re going to conduct the process and will let you
get clear on things like where to assign your staff, whether you should move clockwise or counter-clockwise around the store, etc.
Step 3 - Enlist additional help if necessary
Will you be needing help with the task? If so, plan out the details early on. Who will assist you with counting? How will they get paid? What would their job description be? Give your staff an orientation well before inventory counting day (or night).
Show them your count sheet and make sure they know how to properly fill it out. Give them a copy of the map and see to it that they know where they are assigned.
Step 4 - Start counting
Proceed to doing a physical count of your merchandise. The finer details of this process will depend on your store, the materials that you’re using, and the procedure that you and your staff talked about. In any case, a good rule of thumb is to stay organized. It’s best to arrange merchandise and to make sure that things are in their proper places before you begin the process. And once you start counting, avoid jumping from one category or store section to the other, and make sure you’ve finished counting a particular item type before moving on to the next.
Step 5 - Compare and adjust
Tally up the numbers and compare them with what you
have in your inventory app. Moment of truth. Once you’re done counting, pull up the inventory data you
have in your system, and see how the numbers stack up against what you
have on paper. If all goes well, your item counts should match up. See how to adjust stock quantity here.
A TIP: consider cycle counting
Business owners who are looking to regularly count items without having to temporarily close their stores can implement cycle counting. This is the process of partially counting merchandise on a continuous basis so you can stay on top of stock levels without having to interrupt regular store
operations. Cycle counting entails that you count just certain portions of inventory on a daily or weekly basis so you won’t have to do a full inventory count anymore.
Cycle counting involves taking count of only small portions of inventory at a time. So the first thing you need to do is to plan out which items to count at a given period.
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