No matter which industry or niche in which you work, year-end inventory audits are never fun. Nonetheless, they’re necessary for several reasons. If you want to make your audit simpler, make sure you do some planning in advance. The following tips will help reduce the headache and make your audit a breeze.
#1 – Time It Correctly
The best thing you can do to get ready for your year-end inventory audit involves planning to do your counts at a time that suits your unique business. Consider things like operations, internal controls, your accounting system, the number and location of your sites, and more. If possible, wait for a time when activity is projected to be relatively low. This gives you a better opportunity to count without interruption, and it also helps to maintain proper accuracy.
#2 – Organize and Label
Long before you start counting your inventory, it’s important to organize and label your stock appropriately. QR codes can come in very handy as they allow you to simply scan a label with your smartphone and learn more about a product. For example, you could place labels on individual shelves, bins, carts, or racks that are dedicated to specific products. As more products come in, you simply scan the label and enter the number of products being added to that shelf. This helps maintain accuracy all year long, too, which makes a year-end inventory audit even less painless.
#3 – Line Out Shutdown Procedures
If you’ll need to shut down your operations for any length of time to take inventory, it’s important to plan this very, very carefully. After all, you wouldn’t want to shut down at the busiest time of the year – such as around the holidays. You’ll need to freeze manufacturing during the count, or at least place newly manufactured inventory in an area separate from your other inventory. You’ll also need to make sure that you keep any inventory coming in – such as production materials – separate from inventory you’ve already counted. Create a plan for how this should work beforehand, and there will be less confusion on the day of the audit.
#4 – Plan for Minimal Downtime
The longer your operations are frozen, the more revenue you lose. As such, it only makes sense to minimize that downtime as much as possible so you can continue to generate income. Using QR codes is a great way to do this since it makes it simpler to check inventory in and out. The more organized you stay year-round, the easier it is to count your inventory at the end of the year. Try to set a timeline for your audit, and if necessary, bring more of your hands on deck to get through it more quickly.
Year-end inventory audits can certainly be a hassle, but they don’t have to keep you off the playing field for long. By using the right technologies, planning in advance, and making sure that you’ve minimized the amount of downtime you experience, it can actually go quite smoothly, even with maximum accuracy.
Posted on Tue, November 22, 2016
by Todd Penny filed under