Provides an opportunity to uncover and address potential losses caused by theft, breakage, or unforeseen circumstances.īy reconciling the physical count with recorded inventory levels, businesses can pinpoint any unaccounted-for discrepancies, shedding light on areas where pilferage or damage may have occurred. Helps businesses to begin each year with a clean slate, ensuring the precision and responsibility of their inventory.īy manually tallying and verifying the actual stock against the inventory system, any discrepancies can be promptly identified and rectified. Record the procedures that you have followed during the process.Īdvantages of annual physical inventory Ensures precision and Responsibility.Utilize this time to clean your warehouse and organize it.Instruct the employees to record the counts correctly to avoid double counts.
Stop the receiving and issuing of inventories during the process.Avoid data entry in the inventory management software during the counting process.Instruct the employees who perform the process of handling some situations in writing.Find out and assign some extra space for counting if required.Check the instrument’s accuracy if you use an electronic instrument to count.If you use apps or software for the counting process, upgrade them to the current version.Arrange the necessary stationeries and equipment to perform the process.If you assign more employees to do the process as your inventory is more, make teams, so each group contains a new person and experienced employees.Share the scheduling date and time with them. Inform the outside partners and staff in the company in advance.Train the staff if they are new to the inventory counting process.Assign at least two people to do this process-an experienced person familiar with the warehouse person to count and another to record the quantity.Make sure the days you choose will negligibly affect your typical work process. Schedule the date for processing the inventory count.Find out the number of days or time required to count by taking the stock’s draft of a list of inventories.Determine the intervals between the counts.That will be the periodic or perpetual method. Decide the proper method to count the physical inventory.