7 Tips to Make Year-End Inventory as Smooth Sailing as Possible

If your year-end inventory is typically a tangled mess, listen up. We have Shopventory CEO Dave Carlson here with a step-by-step guide on how to make the end of the year (and the beginning of next) smooth sailing when it comes to inventory. To make all this even more of a breeze, sync your Square account to Shopventory in Square App Marketplace.

As the CEO of Shopventory, a leading inventory management service, I know the words “year-end inventory” often strike deep fear into the hearts of most retailers. However, there’s no better time than an end-of-the-year inventory count to tune up your business and know you’re starting the new year headed in the right direction.

Here are your eight steps to year-end inventory nirvana:

#1. Assess your current status.

Know what you “believe” you have in stock and what it is worth (cost and retail value). Many inventory management solutions, like Shopventory, have reports showing this information. You will want to compare what you believe you have to the actual completed inventory count after it’s done.

#2. Prepare.

Let your staff know when you plan to do year-end counts well in advance. Will you close the business for a certain period to complete the counts or count while your store is still operating? Each business is different and has its own restrictions for when and how to complete the count.

Print out item count sheets by store area, category, aisle, SKU, etc. — whatever works best for your business. Some mobile tablet solutions exist for counting inventory but sometimes good old paper works just as well, if not better. A good count sheet should include the SKU number, product description, and a blank space for the actual count. Do not provide the count from your inventory system as this will bias the counters.

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#### #3. Do the count. Divide the store floor into sections and assign one or two counters to each section. If you have the luxury, assign two people to each counting team so they can both count the same item at the same time and confirm the result. This quite often speeds up the overall process and can greatly improve accuracy. On the day of the count, it’s preferable for individuals not to have their mobile phones on hand. Texting and taking calls only disrupts counts and can really delay the completion of the actual task at hand. Make sure folks know they should not estimate. Ask for the counters to initial each entry after they count. Let them know you will randomly audit several of their counts. It’s just a double check for accuracy. Make sure your counters know there may be cases of products or loose items above, below, or behind a shelf, or even in the back of the store. If counts are off by a large margin or case lot, this is often the reason. #### #4. Make it as fun as possible. Bring in food, snacks, and drinks for breaks. Give 10- or 15-minute breaks every hour or two for folks to chat and check their mobile phones for messages. Counting is tiring. #### #5. Assign a troubleshooter. If a specific item count is off by a large number (you can decide the number), then have one person (perhaps you) who is the designated troubleshooter. You should be the one to research the discrepancy — in real time if possible — so you can try to find the missing product. It’s more efficient for the counters to stay focused. #### #6. Manage your overstock. If you have an overstock/bulk stock/back stock area in your store, do those counts a day or two before the actual floor stock count, and mark the boxes as counted with red circular stickers to let folks know they should not put that product on the floor until after the floor count is completed. #### #7. Reconcile. After you're confident that your counts are good, enter the adjusted counts into an inventory management system like Shopventory. When you make adjustments, make sure to note why you're making the change along with the name of the person making the adjustments. If you discover a large number of discrepancies, you may want to institute monthly or weekly cycle counts of specific product categories. Nirvana is at hand! Having an easy-to-use, real-time inventory management solution will greatly assist you in this process. It also helps eliminate employee theft going forward as your workers become aware of your investment and the importance of tracking inventory accurately as it flows through your store. In short, a good accurate count lets you know how much money you have tied up in inventory and gets you off and running for the next year. *— Dave Carlson is the CEO of [Shopventory](http://www.shopventory.com), a leading provider of inventory management and optimization solutions for medium to small businesses. Shopventory integrates with Square and works seamlessly to manage your inventory in real time. Shopventory is available in Square App Marketplace.* ##### Related Content [Take These Steps Now to Avoid Costly Year-End Accounting Mistakes](https://squareup.com/townsquare/steps-to-take-now-to-avoid-costly-end-of-year-accounting-mistakes/)
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