Inventory counting is a pivotal part of stock management for any product-based business — no matter how sophisticated your inventory system is. During your physical counts, also referred to "stock take" or "stock counts," your organization can uncover how well you’re tracking inventory and identify issues such as stock-outs, over-stocking, and obsolete stock. Leveraging the experiences from working with hundreds of companies around the world, in this Q&A we're breaking down the process and sharing tips for making your annual count more efficient and accurate - regardless if you're using a mobile inventory solution like RF-SMART for NetSuite Inventory Management.
A physical count is when you manually check and record all the inventory that your business currently has on hand. It’s a vital part of your inventory control, but will also affect your purchasing, production, sales and financial reporting. Much like any aspect of inventory, the process of stock counting will vary hugely from company to company, but at its core, an annual physical count is the counting of all SKU’s within a short time frame and is typically done once a year.
Q: What are the benefits of an annual stock count?
Shutting down operations at the end of each year and counting inventory allows companies to start the new calendar or financial year with a clean slate. In addition, some companies are required to conduct an annual stock count in order to meet their auditors requirements or governmental compliance for their industry.
Q: What should I consider when preparing for a stock count?
The type of product to be counted, the size of the warehouse, the number of SKUs, their location and the number of resource allocated to count all need to be considered when preparing for the annual stock count. Having a warehouse that is neat and tidy and correctly labeled is another best practice for stock counts and goes a long way to making the count go smoothly with fewer points of friction. The decision of whether to add additional staff or temporary staff during this time is also a consideration to balance time savings over training.
Q: Are there different types of inventory counts?
Cycle counts are gaining popularity with companies who quickly turnover inventory like the retail industry and don't require the inconvenience of the warehouse having downtime while the physical count progresses. The cycle count needs to be an internal process driven by the need for continuous improvement. Using real-time bin transfers ensures that your inventory is always accurate and up-to-date. RF-SMART can also support how you choose to count - cycle count, directed counts or non-directed count.
Q: Who should be involved in the counting of warehouse stock?
The importance of (and disruption from) stock counts to a business will vary depending on the business process. Businesses employing a periodic system are entirely reliant on stock counts to get visibility over current inventory levels. For these companies, recording stock can mean closing for a day or requiring staff to come in after hours. Some companies bring in extra staff, retain temporary staff or shut the operation down until the count is completed. Attention should be paid to planning the stock take and involving all those are going to do the count are safe, trained and know the implications of making an error. Want to know what not to do at a stock count?
Q: How can automation make the annual count go smoother with RF-SMART and NetSuite
Automating the warehouse eliminates your error-prone manual input of inventory and can ensure your inventory is 99% correct, which means fewer adjustments during the stock count. Correctly identifying product by their barcode in the correct bin location ensures a quick approval process and no printing of paper lists to manually capture at the end of a count.
RF-SMART also supports your business by having various number of quick approval options, the ability to conduct a number of small stock takes simultaneously, and if the real-time bin option is on, there is no need to shut down your warehouse as count transactions are being recorded in real-time in NetSuite.