- Posted August 22, 2014 by
The Best Inventory Tips and Strategies
If you have inventory, then it must be accounted for. Even the smallest of all businesses keep some inventory on hand including office or mailing supplies. Keeping track of your inventory is important to ensure that you always have what you need in stock. Your inventory should also be counted to verify that all items are accounted for. The following are the best inventory tips and strategies you can employ.
1. Set up your inventory. Every business should have a place where inventory is held. Usually, but not always, inventory is kept on site. A dedicated area or a separate room is the ideal place for housing and securing inventory. Depending on the type of inventory on hand you may need to make special accommodations to safeguard it. For instance, a climate controlled storage facility may be useful for holding certain perishable goods.
2. Create a system. How do you account for inventory that comes in and for inventory that goes out? Fortunately, there are software programs that can help you track everything. These include: inFlow, Inventoria and iMagic Inventory. You can track your real-time inventory status, organize your information by category, view your received history, view your items sold, import and export related files and reports, and work with an inventory planning system. Find the system that is right for you.
3. Arrange your inventory. Your inventory should be organized in a way that is easiest for you to access. For instance, if you're working with dried food goods, then set up separate shelving units for vegetables, fruit, starches and other items. You want to be able to account for everything as quickly as possible as well as to retrieve those items when you need them advises Material Handling Exchange.
4. Record and verify. How often should you check your inventory? That is entirely up to you. A weekly review of your inventory may be sufficient, but more often if the turnover is greater. As new items come in they should be recorded. As items go out that information should be recorded as well. A weekly count of your inventory will reveal if there are shortages or overages. Inventory can reveal a lot of things about your business as well as your employees — you may find waste or pilfering. Clearly, managing your inventory can help you respond accordingly.
5. Label all items. Your inventory should be labeled if it is not already labeled by the manufacturer. Canned goods, for instance, have labels on them. However, certain auto parts do not. It would be a good idea to tag these items and place them on a shelf with a corresponding label. If your inventory items are expensive, then adding barcodes and security labels may be in order.
6. Secure your inventory. Who has access to your inventory? Depending on what goods and products you store, your inventory may need to be kept under lock and key. In those cases keys should be distributed to authorized individuals only and always accounted for. You also may find that investing in a security system with alarms and cameras is the best way to go. Consider the cost of such a security system and talk with your accountant about possible tax deductions.
The more valuable or sizable the inventory, the more likely you will want to invest in a software program. Your company should have established inventory procedures in place where requisitions are made, fulfilled and tracked. You might also require that two people be on hand when expensive inventory is moved out, with a supervisor signing off on that movement.
Talk with your accountant about the various inventory methods to employ. For instance, many businesses use a FIFO method — first in and first out. Others use LIFO — last in first out. There may be certain tax advantages in choosing one method over another one.