There is a required rule by tax or accounting that majority of retailers should provide a precise available value of an item in their respective stores by counting all of the inventory physically. However, when it comes to counting, retail stores may be using a perpetual inventory system or other software application in keeping track of all the merchandise.
Conducting a physical inventory can be a challenging task since you will be dealing with numbers and more numbers. If you find it puzzling and irksome when dealing with it, perhaps what you need is proper way of conducting a physical inventory and some added physical inventory templates for your reference. Read more to find out how to go about it.
How to Conduct a Physical Inventory
When handling the physical inventory, you would need a sample inventory template to help you keep track of all items. In addition, we also have a few tips you can follow:
- You need to refill the cupboard with merchandise from the storage or stock room. As much as possible, try to clear out inventory from the back room.
- One thing that you also need to make sure of is that no merchandise should be placed under the office, cash wraps, or any other areas. Of course, you don’t want any sudden news and unaccounted for goods that will pop up unexpectedly.
- You need to schedule this at a time when sales are slow and inventory levels are down.
- Whenever an inventory service has been hired to do the physical inventory, one should follow the reference provided and should come into preparation for the store, and this is according to the instructions given.
- Moreover, if the physical inventory is being conducted by store employees, there should be a meeting together with the staff. This is to discuss and explain the inventory counting process.
Common Mistakes When Conducting a Physical Inventory
A lot of retailers conduct their annual or bi-annual inventories during peak season. And most find themselves repeating small mistakes made in the past, these are the list of common mistakes that often happen during physical inventory.
- Lack of Store Preparation – Regardless of the retailer, by far this is the most common mistake of all inventories. Talking about inventory preparation, it goes more than assuring yourself that there are enough people to count. You might ask yourself, are the stores and shelves well-organized? Or Is all of your product out and available for counting? Avoid this mistake easily with the use of any of the free inventory templates online.
- Not Enough Preparation for the Counter – If certain people responsible for counting the item were not properly trained on what they need to count and the process of counting it, there is a huge possibility that your inventory will be incorrect.
- Not Enough Early Audit Verification – Always make sure that you have a process in place in order to check your counters at least an hour into the inventory process. This is to review for errors or problems that may affect the process. This simple preventative measure can save you when it comes to recounting and expenses.