How many times the inventory should be performed in a year depends mainly on how precisely you want to track the company’s operative processes, which may have a number of benefits, such as:
- identifying entry or sale (picking) anomalies (the item number it is used for entry into the warehouse, the connected products, the size of a set, etc.),
- frequently determining the physical inventory improves the level of service (e.g. the data of the online store),
- the inventory strategy can be based on actual input data, improving product availability (customers are more likely to find the usual products in the store),
- the tendency of theft by insiders is reduced (stronger control over internal inventory activities),
- after the inventory, customers are met by organised shelves.
And yet the question still remains as to whether the inventory should be done annually, biannually, quarterly, or monthly. Let us share a little professional experience with you if you are still unable to decide despite the help found above.
In the catering industry, such as in hotels and restaurants, inventory is generally taken on a monthly basis. This makes it possible to continuously monitor the profit margins of foods and drinks so you can act immediately in case of loss.
However, retail stores in the FMCG (fast-moving consumer goods) sector perform 1-4 inventories per business year. However, company executives who perform full inventories on the warehouse or store stocks once a year have a lot less control over their economic indicators, as performing an inventory once a year gives you a picture of the veracity of the indictors only after the expiry of the given year. If the result is not in line with expectations, you may not have an opportunity or it may be too late to make changes to rectify the problem. To avoid this situation, many executives have inventories performed on a quarterly basis, the result of which is examined together with the accounting reports. If any problems are identified, they can take the necessary measures immediately.
In other retail sectors, such as clothing, drug, shoe, hardware, or gift stores, the number of inventories per year depends on how typical inventory shortages are. However, to monitor your stocks, it is not always necessary to prepare a full inventory. Separating a certain division or product family can go a long way in providing up-to-date stock information and helping you to draw important conclusions from the discrepancies. The procedure can help you manage your stocks effectively, which requires the continuous monitoring of these differences.
By: Dorina Mentés & András Takács