Inventory management is crucial for any business, regardless of its size or industry. But, as a business owner, you may wonder how often you should perform a thorough inventory check.
In this post we aim to discuss the benefits of regular inventory checks, explain why you may want to do them monthly versus weekly, provide tips on the best ways to conduct inventory checks, and demonstrate how outsourcing your accounting functions could factor into it.
The Benefits of Regular Inventory Checks
Performing regular inventory checks is essential to ensure that your business is running smoothly. By keeping track of inventory levels, you are aware of how much stock you have, how much you have sold, and how much you need to reorder.
This helps you to manage your cash flow and avoid overstocking or stock shortages. Moreover, regular inventory checks help identify shrinkage due to theft, damage, or spoilage.
Monthly vs. Weekly Inventory Checks
The frequency of inventory checks depends on the size and nature of your business. Generally, larger businesses with more inventory tend to perform checks monthly, while smaller businesses can consider weekly checks due to the lower quantity typically on hand.
Monthly checks give you a comprehensive view of your inventory, while weekly checks allow you to catch errors and discrepancies quickly. Another factor to consider when deciding on the frequency of inventory checks is the cost of conducting them, including the time and labor required.
Several methods can be used to conduct inventory checks, including manual counts, barcode scanning, and RFID technology. Manual counts are the most basic and low-tech method, but they can be time-consuming and prone to errors. Barcode scanning and RFID technology are more efficient and accurate ways of tracking inventory. Moreover, using inventory management software or apps can streamline the inventory process and provide real-time data insights, making inventory management more efficient and effective.
The Best Ways to Conduct Inventory Checks
For simpler inventory tracking, QuickBooks is a platform that would be perfect for a business. Once the business and inventory grows, QuickBooks might be outgrown, but there are still available applications that can be integrated with QuickBooks to further expand its capabilities.
Fishbowl and Cin7 are two software add-ons that some ADC clients take advantage of. The idea behind these software add-ons is that it makes inventory tracking much easier for businesses involved with kitting different components together to create one final product that sells, or manufactures a final product from raw materials. In a manufacturing scenario, the "work-in-process" inventory must still be tracked between the raw material and final product stage.
Using software that can adequately handle the level of inventory that a business deals with is crucial for making tracking inventory less of a burden.
How Outsourcing Accounting Functions Can Factor Into It
Outsourcing your accounting functions can be an efficient and cost-effective way to manage and optimize inventory tracking. Working with a professional accounting service provider can provide you with access to the latest inventory management technology, streamlined processes, and expert advice. Moreover, outsourcing your accounting functions allows you to focus on core business functions, such as marketing and sales, while ensuring that your financial records are accurate and up-to-date.
Inventory management is crucial for any business looking to succeed and grow. Regular inventory checks help businesses manage cash flow, optimize stock levels, and prevent shrinkage. While the frequency of inventory checks depends on the size and complexity of your business, outsourcing accounting functions can provide you with the expertise, technology, and streamlined processes to ensure that your inventory management is always running smoothly, so you can focus on growing your business.
