Businesses struggling with erroneous inventory data, extensive yearly physical inventory, and huge adjustments to results of physical inventory should consider performing cycle counting. Generally speaking, cycle counting involves the continual validation of your inventory’s accuracy by counting some of the inventory regularly, either on a weekly or daily basis. This means that every single inventory item would be counted a couple of times yearly.
If you have yet to incorporate cycle counting in your business operations, below are the benefits that you stand to reap:
- Regularly counting your inventory offers an extra level of efficiency to your business operations. When you’re counting something constantly, your inventory would always be organized, displays would always be filled, new receipts put away promptly, committed inventory tagged accurately, and all transfers processed properly explains an experienced reverse logistic technology and inventory management specialist at ReverseLogix.
- It’s difficult to leverage the replenishment function in retail software programs without an accurate inventory. Also, fully using replenishment software with accurate inventories results in increased sales.
- Regular cycle counting reduces the time needed to physically count inventory, so the cause of any inaccuracies found during cycle counting would have been fairly recent. This would in turn give your the chance to accurately determine the cause of inaccuracies, resolve human errors, and do away with procedural loopholes. Further, inventory write-offs would be reduced as well with a solid cycle counting program.
- Employees who don’t know or understand inventory, especially when faced with customers, can’t offer great customer service. When inventory information is inaccurate or deficient, and the required reorders are not arriving when they are supposed to, it’s extremely hard for your employees to present a positive and confident face to customers. Having a solid cycle counting program in place would positively affect your customer service.
With frequent cycle counting, by capturing and keeping track of results regularly, your business could significantly improve your inventory accuracy and overall financial reporting. Over time, you would experience reduced inventory discrepancies. You also provide your employees with the chance to respond more promptly to customer service, shipping, and purchasing issues due to the well-timed identification of inaccuracies.