One of the most important practices for an inventory-based business is an end-of-the-year inventory count. When you perform regular stock takes, you can trust that your inventory quantities and valuations are accurate.
Having an inventory management system (IMS) can help, especially if you have a lot of inventory and/or complexities at play. From helpful technology and integrations to insightful reporting, we have narrowed down the ways an inventory management system will help you nail your next year-end inventory count.
Are you stuck on the “why” behind inventory counts? Just ask your accountant and see how they wince at the idea of foregoing them; especially at the year-end. Any business managing and selling products must do regular inventory counts for several reasons:
Understanding the data from regular inventory counts allows a business to protect its stock from further losses, better understand its cost of goods sold, and plan based on the data. To gain accurate information efficiently, an inventory management system is a must.
Here are the primary ways Cin7 supports end-of-the-year inventory counts.
If you have ever had to rely on periodic manual counts by slow-moving warehouse contacts, you can appreciate the idea of real-time up-to-date stock data. An inventory management system provides this type of visibility into product stock levels. This ensures that the end-of-year inventory count - and any stocktake performed over the year - is using real-time system-calculated stock data as the expected quantity. You may still uncover discrepancies during a manual count, but your baseline stock data is coming from a trusted source.
The technology integrated with an inventory management system streamlines the stocktake process. Cin7 offers functionality like barcode scanning, data entry, and reconciliation. This functionality reduces the reliance on manual labor and minimizes human error.
By digitizing inventory data and automating key processes, an inventory management system improves data accuracy. No more sloppy manual inputs from that demotivated warehouse worker doing their 50th inventory count of the week!
Data accuracy is crucial during end-of-year counts. It helps identify any inconsistencies, discrepancies, or inaccuracies in the inventory records. Knowing this data enables you to take action to avoid losses in the future.
Maybe there is one location that loses or reports inconsistent inventory counts more than others. Or perhaps one location moves inventory quickly and does not have enough on hand consistently? Saving cash by reducing losses or shipping costs can go a long way.
Spotting any patterns or anomalies that can help make sales-boosting and cost-saving decisions is a big deal. An inventory management system provides comprehensive visibility into inventory locations, stock movements, and replenishment needs. This visibility allows CPG companies to identify slow-moving or obsolete items, optimize stock levels, and make informed decisions regarding end-of-year inventory adjustments.
We are accountants and we love audits! An inventory management system keeps a detailed record of all inventory-related activities, including stock receipts, transfers, and adjustments. This audit trail serves as a valuable resource enabling companies to demonstrate compliance, track inventory discrepancies, and identify areas for process improvement.
Generating accurate and comprehensive reports is essential during end-of-year inventory counts. An inventory management system simplifies the reporting process by providing pre-built templates or reporting options you can customize. This allows CPG companies to analyze inventory data, identify trends, and make data-driven decisions for the upcoming year.
Cin7 offers useful technology, integrations, and informative reporting that is easy to compile and review.
At the end of the day, it will always be about maximizing cash and demonstrating value. Having an IMS at play supporting these counts, can lead to significant cost savings for product-selling companies. By optimizing stock levels, reducing carrying costs, and minimizing inventory write-offs, businesses can improve their financial performance and enhance profitability.
In conclusion, an inventory management system is a vital tool for CPG companies to support end-of-year inventory counts. It helps to ensure accuracy and increases efficiency; which ultimately contributes to cost savings. By leveraging the capabilities of such a system, CPG companies can successfully manage their inventory and prepare for the challenges and opportunities of the upcoming year.
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Accountfully and Cin7 have partnered up to provide the ins and outs of basic to advanced inventory management in this special Inventory Management 101 Series. If you manage inventory and seek more precise control over your cost of goods sold and more insight into your greatest asset, consider implementing an IMS to support your goals.
For more information on Cin7 and its products, visit our expert partner page, where you will get to know the product in detail and read client testimonials.