As the new year begins, businesses everywhere embark on one of the most critical operational tasks—stock counts. Whether you’re a retailer, wholesaler, or manufacturer, performing an accurate beginning-of-year (BOY) stock count is essential to ensuring correct financial statements, compliance with regulations, and better inventory management. At the same time, starting your inventory cycle for the new year requires strategic planning to optimize stock levels and prepare for upcoming demand.
This blog will cover essential tips to streamline your stock count and inventory turnover process, with a focus on using technology, training staff, and implementing best practices. By following these strategies, you can save time, reduce errors, and set your business up for success in the new year.
Starting the year with an accurate stock count isn’t just about knowing what you have in your inventory—it is critical for:
It also helps you avoid stockouts, overstock, and missed opportunities and ensures your business can respond to market demand while keeping costs under control.
The days of manual stock counts using clipboards and paper lists are behind us. Investing in stock counting technology such as barcode scanners, RFID systems, or mobile inventory apps can revolutionize your stock count process. These tools:
For businesses already using inventory management systems like Cin7 Core, integrating scanning technology can streamline the process even further.
Stock counts require precision and focus. Ensure you select team members who are detail-oriented, responsible, and comfortable with the counting technology in use. Poor attention to detail can result in significant errors, which could affect financial reporting and operational planning.
Provide training sessions before the count to ensure all staff are familiar with the process and any equipment.
Stock count discrepancies—where the physical count doesn’t match the inventory records—can indicate issues like theft, data entry errors, or damaged stock. Address these discrepancies as soon as they arise:
Delaying this process can lead to compounded errors, making it harder to reconcile later.
Preparation is key. Conducting a mock stock count in the weeks leading up to your BOY count can help you identify potential challenges and test your processes. During the mock count:
When performing a physical count, ensure that the cost or retail price of the items is not visible to the counters. Displaying costs can inadvertently bias the counters, leading to inaccurate numbers. Instead, focus solely on the quantities to maintain objectivity.
Attempting to conduct a stock count while the business is running creates chaos. Suspend all operations involving inventory movement, including receiving shipments, processing sales, or transferring stock, during the count. This ensures the numbers remain static, making it easier to reconcile physical counts with system records.
On the day of the stock count, limit access to the inventory area to only those directly involved in the count. This:
Prevent unauthorized access to the inventory area before and during the count. This adds an extra layer of accuracy by avoiding accidental interference or intentional tampering with stock.
An inventory management system like Cin7 Core can simplify the entire process by:
If you’re not using inventory software yet, now is the perfect time to invest in a system that suits your business needs.
Once your beginning-of-year stock count is complete, it’s time to focus on optimizing your inventory for the year ahead.
Review your sales and inventory performance from the past year. Identify:
Inventory software can generate reports that highlight these trends, giving you actionable insights.
Entering the new year with slow-moving or obsolete stock ties up valuable capital and storage space. Use strategies such as:
Clearing this inventory sets the stage for leaner, more efficient stock management.
Work closely with your suppliers to anticipate lead times and restocking needs for the new year. Prioritize fast-moving items to prevent delays and stockouts. Maintaining a balance between stock availability and overstock is critical for cash flow and operational efficiency.
Inventory software with demand forecasting capabilities can help you predict future inventory needs based on historical data, market trends, and seasonal fluctuations. This minimizes guesswork and improves accuracy.
Cycle counting involves counting a subset of your inventory on a regular basis, rather than performing a single large-scale count. By integrating this practice into your regular operations, you can:
Preparing your inventory for the new year is not just about systems and processes—it’s also about people. Involve your team in:
Track essential inventory metrics such as inventory turnover ratio, stock-to-sales ratio, and gross margin return on investment (GMROI). These metrics provide a clear picture of how well your inventory is performing and where adjustments are needed.
Beginning-of-year stock counts and inventory turnover are critical tasks that can set the tone for your business’s success in the new year. By incorporating technology, training your team, and following best practices, you can ensure these processes are smooth, efficient, and accurate.
Are you ready to take control of your inventory? Consider using Cin7 to help streamline your annual count, and start implementing these tips today!
