Megaventory Blog - Online Inventory Management Software, Order fulfillment and Control System
This is the company blog for megaventory, an online software that helps small businesses that buy, sell and manufacture physical products to manage sales, purchasing, manufacturing and inventory. We blog about new features and updates but also about enterprise software, small businesses, cloud computing and the industry in general.

Friday, December 30, 2016

How to Prepare for Your Annual Inventory Taking



The end of the year is great to perform a physical counting of your inventory to start fresh in the new year. On top of that, as people cease shopping after Christmas, it is usually the slowest time of the year, making it a perfect time for you to minimize or stop your sales operations for a while. Let’s see how you should prepare before inventory taking so your physical counting will go as smooth and quick as possible.



Inform suppliers and clients


During your physical counting, product movements should be stopped or be minimized and well documented. You will not be able to receive or fulfill new orders, so it’s best to inform your suppliers – and clients if applicable – when the inventory taking will be performed. Do this ahead of time so they so you don’t put any additional pressure to them. After all, November and December were the busiest and most hectic months for all.



Do a mock Counting


Physical counting of your inventory can take up a lot of time. Because no one likes wasting their time, a mock counting will help you estimate the time and resources needed for the actual counting. Take a small fraction of your inventory and record the time needed to count it. Then multiply this time with the areas that need to be counted. If you are short on people, divide this sum by the number of people available to see how long it will take to count your whole inventory. If you are short on time but plenty of people, divide the sum by the available time, to see how many of your stuff need to be there on counting day. A good idea is to have one additional staff member than what you think is needed. Problems could arise and delay the process, so an additional pair of hands can speed things up.



Communicate early with team members


The annual inventory taking usually takes place during off business hours and during the holidays so your employees might have already made plans for the day. Inform everyone well ahead of time to make sure they are available, or they don’t have to cancel their plans.

That being said, not everyone on the team is required for the counting. First of all, a very experienced employee should be present to check that everything goes smoothly. With their guidance, your team won't waste time by having to figure out on the spot what to do. Also, this process is a very good learning experience for a new employee, as they will get to better know your merchandise, so don’t hesitate to call inexperienced members as well.




Clean and organize your warehouse


Before starting the actual counting of your merchandise, it is highly important to clean up and organize your warehouse, or the place you keep your products. It will make everyone life easier during the counting and the whole process will go much faster. Therefore, during the clean-up dispose of any defective or obsolete inventory so you don’t waste time on those products during the counting.



Pull away tied inventory


To make the counting easier and avoid mistakes, it is vital to pull away any products tied to orders. Ship or pull everything on order and don’t fill new orders or receive products while counting. If this is impossible for your business, start the counting with your fastest moving products that bring the most money. That way you can have your stuff start filling new orders sooner. Plus, those are the products that most likely will contain counting errors and could delay the whole processes if counted at the end when everyone is tired.



Have the proper equipment


The right equipment can do wonders during inventory taking. Barcode scanners connected to your inventory management system or excel can speed up the process immensely. Make sure that your personnel knows well how to use them before counting starts.

Nevertheless, even with the best system, problems and questions may arise so a good idea is to be in contact with your system’s support team during the counting. Check beforehand if they will be available during that time and try asking any questions you have well ahead before the counting.



After the Counting 

When inventory taking is completed, arrange a meeting with your team to discuss what worked during the counting and what didn’t, and write down what you should change for next year’s counting. After all, holidays are to be spent with family and friends, and every minute you save is time that can be spent with those special people.

We hope this list can help you achieve that. If you have already done your annual inventory counting, let us know in the comments below or tweet us! What worked for you and what didn’t? We want to know!