How often do you count inventory for your retail business? The standard is twice a year, often at the end of January and the end of July. But, there is a downside to tackling this most crucial aspect of running your business in this way. It takes time. And to get the job done accurately, with no distractions, it could mean closing up shop during regular business hours. Of course, that means lost revenue.
Have you ever considered cycle counting? Cycle counting is basically doing item counts of certain areas of inventory on a regular basis, “cycling” through until all items are counted. Many retailers use this method instead of a bi-yearly full inventory count specifically to avoid the necessity of closing operations to get it done.
Cycle counting can help with keeping track of stock levels accurately and can even minimize shrinkage issues, such as theft. According to the U.S. Retail Fraud Survey, employee theft is a leading cause of loss, costing retailers $60 billion a year.
Even if theft is not a problem for your store, inventory accuracy improves efficiency, and that’s always a good thing. What if you discover a discrepancy when comparing records? If the problem is not theft, it could simply signal a need to get more organized in the stockroom to avoid the expense of overstocking on an item. Clearly, cycle counting can positively impact your bottom line.
Cycle counting does require a system. Should it be based on value of items, or volume of movement? Should it be done daily, weekly or once a month?
Count on a professional inventory management service to answer these questions and to develop best practices for you that will ensure a successful cycle counting strategy for your retail business.