How accurate are your material records?
As a business owner, your list is always available. It is almost certain that for the most part, your latest records do not match 100 percent of your actual assets.
That’s why you should periodically align your material records against your body stock. Doing so helps you identify the source of inconsistencies, improve your processes, and prevent losses from theft.
Verifying records of items is a huge task even for a small business. Many companies close long hours to make amends, losing out on sales opportunities that they would otherwise be able to enjoy.
Is there a way to synchronize inventory and stock records without closing the store? If you have the right approach and the right equipment, there are.
What is Inventory reconciliation?
Inventory reconciliation is the process of matching your stock records with what you have physically in your store. In addition to counting items and updating your records, this whole process allows you to find stock differences, so you can adjust them.
In this post, we’ll take a look at the steps involved in reconciling your stock, as well as tips to make the job easier.
How Inventory reconciliation works
The details of the return process will vary from one seller to another, but in general, this is what happens when a seller returns his stock:
Step 1: Count your products
First, the business closes its doors to the public, usually within a few days. It can be helpful to spend some time planning your sales space to make inventory easier. Proper preparation can save many hours during stock recovery.
Some retailers, especially supermarkets, will spread the stock exchange within a week, paying employees more time to spend a few hours each night - this method keeps the business going, but brings additional costs, such as overtime pay.
Step 2: Examine (and review) your records
Next, employees compare transaction records with the availability of each item in stock. Lists are checked and re-checked to ensure that no employee misuses the stock number. Items not included in the serial may not have a stock number and need to be compared with the supplier's invoices.
Once this time-consuming process is over, you can compare the results to find out what the differences are. This is because of lost papers, bad statistics, personal errors, fraudulent suppliers, or products not listed on the consignment list.
Step 3: Talking about things that don't exist
Once these differences have been identified and calculated, you should address the missing items. This requires passing through sales documents to indicate whether a particular sale is being ignored. Often, when a simple statistical error explains the inventory variance, a lost sales receipt can. If no sales receipt is lost, then you are left with the theft or fraud of suppliers.
The difference between the amount of stock you show on paper and the amount you have physically is called a decrease. Shrinkage is expressed as a percentage using the following formula:
The National Retail Federation accounted for the 2016 annual decline by 1.44 percent of total sales. This figure changes depending on your particular category, but if your losses are more than double that number, you should take immediate action.
Step 4: Identify the reasons for the differences
At this point, you can talk to your employees to determine if anyone is abusing the company's inventory. Start with inventory staff, visit those who can get into the cell, and end with your sales team. But finding a criminal is not guaranteed - without this effort, you may simply have to accept the inexplicable decline as a fact of life.
Step 5: Verify that your records are the same
Without the cause of the asset loss, you need to align your asset records to match the actual number of items you have in your list. To do this you need to create a payment reconciliation statement that outlines your previous statistics and accurately represents your current stock.
If you are using Excel, there is no stock reconciliation statement format, so you will need to manually update each item.
If you are a modern inventory or sales management platform, you can sync your records by simply updating the items in your system.
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