Short instructional video where Donna Genie explains practical inventory-management practices for a studio. She emphasizes performing physical inventory counts (at least annually, preferably more often using POS categories or shelving areas), valuing inventory at cost (not retail), and monitoring key performance indicators to guide ordering and detect issues like theft or miscounts.
Inventory is an area where people cringe when I talk to them about it. It's never a perfect process. Inventory is always flawed. So you'll want to make sure that you have your procedures in place to keep the best track that you can. At least on an annual basis, you'll want to do a physical count of your inventory that involves checking out the cost of each piece of inventory that you have and coming up with a total value at your cost. The retail value does not matter. You'll want to take the cost of the inventory what you paid for it, and figure out how much in inventory you have total. Now, to make things a little bit easier, I actually recommend doing this more frequently than once a year. If you've got a good point of sale system, do categories or do shelving areas and do physical counts more often. First, you'll get a better idea of where you are throughout the year for ordering replacement inventory and learning about what moves in your inventory. Secondly, you'll be able to update these numbers more frequently than just once a year. You'll also be able to spot any problems that you may have with theft, breakage, people bringing up the wrong piece in your point of sale system and not accurately having a good count on that info. So at year end I am always going to ask, hey, what was the value of your inventory at 1231? So you'll want to know how much did my inventory cost me? Also, keep an eye on this value. Keep in mind that you have some key performance indicators that will help guide you along the way to know how much inventory you should have. I hope this helps you and you have a great day. Thank you.
