Inventory Count: Taking a Physical Count of your Product

Hey guys, it's Sarah with the Boutique of and I am back today to talk to you about taking a physical count inventory. I know. Now before you jump off, guys, this is non negotiable. If you're in business, it's just part of it. It has to happen. If you are not at least taking a physical count inventory once a year or what we call cycle inventory. Cycle counting, which would be like counting a class, say denim once a month, right. And then maybe dresses the next month. Because you're missing out, not missing out on some awesome, amazing, fun opportunity. However, you're missing out on actual real life data in your store and you are missing potential errors or risks of theft. All sorts of different things that can happen in your business that can just throw off your numbers completely. So it's great to at least once a year go back to a hard, fast baseline of your business and have accurate numbers. Because we all know different things can happen throughout the year. We can make mistakes on receiving or sales or transfers, or there can even be inventory theft happening in your store and they go unnoticed, right. Or they go unfixed. So it's really important to go back and make sure at least once a year you're taking a physical count inventory. So hopefully you're still with me and you're like, all right, Sarah, tell me how to do it. All right, I want to kind of dumb it down for you guys. It doesn't have to be painful, it just has to get done. So when is a really good time to do that? Well, I personally, in retail, with our store, I like to do it when my inventory was at its lowest. Right. So I pick right after the holidays. I would either do it in January or I do it in July because typically our inventory was at the lowest at those times. Okay. Every person on your staff that it's going to affect has to be on the same plan that you do. So when you decide you're going to do this, map it out. You know, take the time to say, all right, in two weeks we are taking a physical account inventory. And these are the things that have to happen to make it simple on us so we get good numbers, accurate numbers, and we can do it quickly and efficiently. Because if you happen to close to take inventory, you're missing out on opportunity for, for sales. Right. If you're doing it after hours, you're paying additional payroll. So it does cost you some money to take this time to do this. But like I said, you have to. So if you're going to do it during open business hours, make sure you are somehow able to let your customers know that, right, you don't want them to feel like they shouldn't be shopping with you. Hopefully your system is going to be strong enough that you can continue on account even with with them shopping. So here's a few tips to get organized and get ready so this whole process can go smoother. 1. Make sure your staff at some point a couple days leading up to the big count day goes through. And make sure everything in your store or in your warehouse has a price tag, hasn't has a barcode if you're scanning or has a style number, if you're counting style numbers, or price tag tag, if you're counting prices. Whatever it is, however your system is going to work, then make sure all displays are torn apart. Right. I don't want to see things layered up where you are going to count the blazer, but you might have missed the layering piece or the scarf or the necklace that's layered with it. Everything should be taken down off of shelves. It should be taken out of the nooks and crannies. Everything has to be counted. If there is a shoe box, make sure there's a pair of shoes that matches the shoe box, right? We don't want to just count boxes because potentially what happens is maybe somebody bought the size 8 in that shoe, but they didn't want the box. But weirdly enough, the box is still hanging around, but there's no shoes. So make sure if it is in your store, it's identified, it's located, it's straightened in an area that when it comes time to count, you can go down the line, scan those barcodes, tally those prices up, and account for your inventory. Now that can happen the couple days before the big count. This now what happens during the big count? Right? You need to assign duties to whoever's on staff. Whether you're hiring somebody to come in and help you or you're using your actual staff. Give everybody a role. Make sure that Sarah and Susie and Sally all know what their role is in the inventory count. You don't want Susie doing Sally's role. You don't want Sarah doing Suzy's role. Everybody has to be on the same plan. Have a map of your, of your layout of your area and make sure everybody knows where their role is in the store. So now that everybody's on the same page, everything's organized, everything has a price tag. Now it's time to test your system. You want to go into your point of Sale system and figure out exactly what is it saying you have. What is it saying you have. Run those reports, get those numbers of what you think you have, right? So you can do the comparison later. Now it's time to scan. Hopefully you're using a barcode system that allows you to just take your portable scanner and just zap all the way down through your store. That way you can go in the back room or in the basement or wherever it is right now. If you can't do that and you are actually going to be counting prices or you're going to be counting SKUs or you're going to be counting sound numbers, whatever your system is, make sure it's consistent. So if you have any questions, I urge you to jump on the phone with your point of sale system early and just say okay. Hey, this is Sarah with whatever boutique getting ready to count physical inventory. Can you walk me through the best practices for using your point of sale system or have there been any updates to counting physical inventory? Any new systems put in place that is going to make this more easy than it was last year, right? That that phone call could literally take two minutes, but it could save you hours. So do that. All right, so now it's time to count. Everybody has the rule, everybody has the game plan. Once you start, go all the way through. Don't start and do this part today and then wait and come back and do another part tomorrow. Now my, my tip on efficiency is when you start, go all the way through and finish. Everything needs to be counted. Like I said, the boxes of shoes, the inventory that's back stock, the inventory that's maybe in a transfer coming from your store, number two to store number one or it's in a warehouse. Anything that you own that your computer says you have needs to be accounted for. All right, Sounds simple enough, right? Once you have all of your data, now it is time to compare. Now it's time to reconcile these things and compare your assets, right? Making sure we're doing apples to apples and if we have any adjustments, take that up with our accountant and we can adjust our inventory as necessary. Everything needs to be counted. I hope if you take anything away from this, it's about getting organized, taking those displays down, ripping those layering pieces and things like that apart so you can quickly go through, physically count whether, like I said, with tally marks or scanning and then learn from what you have done. This is so important when you go ahead and see the adjustments or see where you, you have variations. Super important for you to identify possible ways that you failed throughout the year? Is there shrinkage? Is somebody stealing from you? Are you doing a poor job of managing how you bring transfers in or receive inventory? There's always an opportunity to learn. And at the end of this whole thing, you can rest assure that if you've done all of these steps that you have the accurate amount of inventory that you say you do. So when it comes time to paying taxes on your inventory, you're paying what you should, right? All right, guys, there is an entire blog that outlines this more specifically than this video did and hopefully answers some more of the questions that you might have. But if you do have other questions, please don't hesitate to ask us. We're an open book here at the Boutique Hub. We are all about education. So inventory management, physical count, inventory, inventory turn, all these kind of things. If you have some more questions, please don't hesitate to ask. We're here to help. So until next time, happy counting.