Now that you have set yourself up for success by following all of the recommendations from Day 1 and Day 2,  it is onto Day 3. Today you will begin the counting process, one of the most important steps of a successful inventory. Following these simple steps will help you in completing your inventory correctly and efficiently.   Make sure you schedule a time to do this when the store is slow or closed – if doing it while closed, it’s best to section off areas as they are being counted – so you are not selling items from the counted inventory.

What to do on Day 3

Front of the House Things to Do

Using the mInventory app you will need to go to Inventory counts and start a new project. It is best practice to name the project based on the locations you are counting. 

Once you have created the project it is time to start scanning. The scanning can be done two ways. The first method is to scan every item individually, this will be the most accurate way to scan as it will make sure you are counting similar items as the correct UPC. The second method would be to scan the item once and then type in the total count for that item. If you do have similar items with different UPC you will need to make sure that you separate them before attempting to scan your inventory with this method. 

Once your whole section is counted you will export the project and email it to your manager.

Backoffice Things to Do

The manager will receive all exported project files which will contain the details of who counted each section and what was counted. 

After all projects have been consolidated, the manager will compare these counts to the current quantity on hand using an IBR from the CAS Portal to find any large discrepancies. 

These large discrepancies will then need to be recounted to verify that all pieces have been accounted for. 

As a best practice, you can randomly select products and recount them – assuming there is no variance, you can be confident of the counts. If you see substantial variances, you may want to determine if the errors were with one counter or section and expand the recounts accordingly. Some stores keep counting until all items have been verified (the same count appears twice). The comfort you have with inventory counts is not decided in the annual count – it’s typically achieved in periodic cycle counts.

Review all the adjustment reports and confirm the count once you are satisfied that you have an accurate count.

In the next blog, we will discuss best practices in analyzing your inventory and maintaining accuracy of your stock levels throughout the year. For more details on Key Performance Indicators you can read our blog post on Retail Math.

Hopefully you have had a chance to get through all the Day 1 Activities, to review here is a list; don’t be tempted to skip through the steps in the interest of saving time today as it will result in a lot of extra time being spent on the count day to reconcile the inventory. You will be pleased to know that Day 2 is much easier than Day 1, but equally important to a smooth count.

Backoffice Things to Do

1. Complete any pending write offs,  transfers or vendor returns in the system

2. Connect and push all data from offline POS machines to the cloud

3. Verify all pending invoices have been properly received

4. Review your negative quantities to make sure there are no mislabeled SKU’s or that items were improperly received

Front of the House Activities

5. Your team has organized the store and made sure that inventory has been organized in a way that is easy to count

6. Any damaged items are written off, returned to vendor or discounted to sell

What to do on Day 2

Backoffice Things to Do

1. Begin by organizing the store (and storage area) in sections – determine who will count which section; some things to consider is rotating the counting so that the same team member is not always counting the same product.

2. As a best practice you should initiate a blind count and instead of counting one product and then moving on, we recommend that you use the mInventory application to count an entire area in whatever product order the items come up in. mInventory can be used on Android and iPhones and allows the counter to scan the product as it comes up and then consolidates all the counts at the end.

3. If you are counting at a product level then make sure you run a 0 balance report (especially items with recent sales) and check for those products – something may be in the store and incorrectly show as 0 on hand.  This is yet another reason to do section counts.

4. Lastly and not really for the inventory count but as a best practice , run a report on all pending or backordered purchase orders, and consider if you still want the product or need to cancel the order. Avoid surprises of items showing up after you have already ordered substitute products and creating a problem for you.  To avoid this you may want to use the shipping and vendor compliance sections of the PO’s to set cancel dates on unfulfilled orders.

5.  For Extra Credit: Run Attribute Analysis Reports to see Margins, Stock Days and Turnover by Department, Category and Vendor – This can help you plan any promotions in the future to move non performing or overstocked items

Front of the House Activities

Have your team download and familiarize themselves with mInventory, especially the section on Inventory Counts.  Make sure that each team member has their own user name and password and can log into the app; if passwords need to be reset or user created you should do so now using nGauge or the CAS Portal

On Day 1, your team would have organized the product and checked for damages, during the course of doing that they might have run across items that did not have barcode labels, this would be a good time to print those and resticker the product; if you are using CAS to print the labels you can use roll or Avery labels on your laser printer (money saving tip) or you can use Label.It for more printing styles and options.

Tomorrow is day 3, we will go through the best counting practices.
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It’s that time of the year!

No, I am not talking about New Year’s resolutions – I am talking about getting your inventory done and putting in some best practices to keep your investment in inventory efficient year round.

I will be posting 5 blogs that will get you ready for your annual inventory counts – the first 3 will be to break down the activities you do to prepare for the counts and the last 2 will be on the best practices that you can implement to keep inventory managed year round. You may have already had a chance to read about how to do ABC Cycle Counts by Justin McCollom from our Major Market Team, which discusses the importance of having good inventory management to support your Online Ordering/eCommerce sites. My approach over the next 3 posts is to take you through a more granular list based process. So don’t forget to subscribe to new blog posts over on the right panel.

So let’s get into the tasks – this is really meant to be a checklist that you can share with your team, and since many of you reading this will be retailcloud customers, I will occasionally refer to specific processes within the CAS Portal.

What to do on Day 1

Backoffice To Do List

1. Begin by making sure all pending adjustments and transfers are committed and finished. This is the single most overlooked step and it can derail the most carefully thought out counting plan.

2. Make sure all Point of Sale machines that have been operating in offline mode are connected so that their totals can be pushed to the cloud and sales and inventory data updated. Don’t forget the handheld devices that may have been used for a road show, pop-up, line busting or additional devices during the holiday season.

3. Check all of your recent Invoices, make sure that there was an inventory receiving done for each of them. On any that were not received yet, go ahead and do them and don’t forget to add any shipping costs so the system can accurately calculate your cost of goods sold. While any missing receivings will be corrected in your counts, they will be feeding false data into the system that can impact your reorder alerts in nGauge as well as your margin and markdown analytics that help in pricing strategies.

Almost done!

4. Finally run a report of all of your negative inventory counts – determine if these negatives are due to missing receivings or mislabeled products.  If, because the receivings were missing then investigate that and correct if possible (as I mentioned in Step 3 the inventory count will eventually adjust this but it’s best to correct the errors if possible). If, because of mislabeled product, you will either need to relabel the product using the LabelIt or the Barcode Printing software or link the skus into a new Master SKU

From the back of the house perspective you have accomplished a lot today, and built a foundation of success for your full inventory count.

Front of the House Activities

Start organizing the inventory in the store so that it will be easy to count, have your team prepare a floor map by Department or Category of where the product is and to begin to place it.  If your store is not organized and ready to be counted, then this is a good place to start getting it prepped for inventory and gather like items together. 

While organizing, take some time and look out for damaged items, these should be inspected and discounted or adjusted out of inventory as needed.  Good luck, please share your feedback and don’t forget to subscribe so you can see the next post – if you don’t want to subscribe, you can join us on Facebook or Twitter.