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Planning for the year-end physical inventory count

Planning for the year-end physical inventory count

The end of the calendar year coincides with the holiday season. That usually means shopping, meeting loved ones, receiving gifts and taking stock of the past year. For manufacturers, it means taking stock in a far more literal sense. Physical inventories need to be done in order to make sure a company has everything it needs for the next 6-12 months. A mobile warehouse management system can greatly help keep the time and cost of physical inventory counts down. However, it's still a good idea to prepare for the accounting process so that mistakes aren't made when the day comes.

Scheduling and organizing everything
One of the first things that a company should do in order to kick off the physical inventory count process is to schedule a day and time for it to actually occur, according to accounting site Simple Studies. This can be an entire shift, or just a set of hours. Given this is the end of the year, the ideal time to do this would be in the week between Dec. 25 and Jan. 1. If the company has multiple storage and distribution facilities, a staggered count with each day dedicated to one or more warehouses would probably be most beneficial since a business can still be operating at an optimal capacity while the counts are being done.

Once the day is set, the warehouses should begin getting organized. That means cleaning up the facility, along with placing various items in the areas where they belong. Some businesses may see this as an opportunity to reorganize the space so that the process is made more efficient. During this time, Accounting Tools suggests reviewing all the inventory and looking for anything that may lack the correct part numbers, or are in no shape to be counted. If either are the case, the errant part should be put aside or fixed so that the count is accurate.

Bringing everyone together
An important aspect of physical inventory preparation is having counting teams on the ready. While barcode data capture has made the process very simple, it's still a good idea to have some partnered groups available so that process runs smoothly. A good rule of thumb is to select a veteran at the company to do the actual count and pair them with a less experienced employee to verify.

Once everything is organized, if there are any remaining items that can't be reliably counted for various reasons, they should be addressed so that they can either be placed back in stock or discarded. From there, it's advisable to complete any outstanding data entry transactions such as item transfers, returns and shipments. After that is completed, the final step is to shut down operations in a way so that the count will not be impeded. That means ceasing all warehouse activities and segregating arrivals from other locations in an area where they won't be counted. A reliable count can only be achieved with proper software and planning.

For more information on improving efficiency with barcode technology, download the free white paper entitled "Keeping the Physical World and the Virtual World in Sync" from DMS today.

Posted in: ERP Solutions, Inventory Management

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