It’s that time again that everyone dreads the most: Inventory time. When you have to physically account for each and every item in your inventory and reconcile it against your management system. What has come up missing? What inventory movement have people forgotten to record? How many items have been issued the wrong tag? What’s been transferred between locations but not recorded?
Don’t Worry, Be Happy.
There’s never an easy way to take physical inventory – but RMPro certainly makes the job go quicker and easier. Using the Physical Inventory module in RMPro, you can record all the inventory you physically have in store. It will automatically compare what you entered to what RMPro says you should have in your store. In the end, and along the way, it will produce exceptions to let you know when items are missing, which items you have but shouldn’t have, which items have been duplicated, and more.
Can I Use a Barcode Scanner?
Yes! The Physical Inventory module is optimized to work best when you have a barcode scanner in the mix. It’s not a requirement, but if all your items have a printed RMPro barcode, you can zip through it. Remember, there are two types of barcode scanners: Direct Input (as soon as you scan it goes to the computer), or Memory (scan many items then load them all to the computer at once). You may choose to use either one, depending on your preference.
But I Don’t Have a Barcode Scanner.
You can use RMPro to take an inventory without a scanner too. There are actually a few options to entering items. You can directly type the numbers one by one. You can also save a list of items in a text or Excel file and load that file. Whatever method you choose, the end result is the same – everything you physically find in your store gets recorded into batches and compared against your RMPro system.
I Have Items in Many Locations.
That’s fine – when you take an inventory in RMPro, you can do one location at a time. Most importantly, those locations can be compared together. Suppose you have an item which someone transferred from one location to another, but never recorded it in the system. Once you take an inventory in RMPro, this will be made clear to you, with an option to transfer it back to the correct location on the spot.
How Do I Get Started?
The first steps are just like any physical inventory for any industry: Preparation. This mainly includes organizing your stock where it belongs, and avoiding too much inventory movement. In fact, many companies shut down completely while taking an inventory. The last thing you need during this time is a customer having you dig through your inventory and mixing it up. That could result in having to re-start everything from the beginning again.
It’s highly recommended to have what we call an “inventory cart” for this process. This consists of a small cart on wheels, which has a laptop computer, a barcode scanner, and a label printer – in case you need to print new labels as you go along. The more you can accomplish at a single moment for a single item – the better. Nobody likes running back and forth or doing the same thing twice.
It’s critical that your inventory is organized in a way that you can find things easily. In the rug industry, this is typically done by size. Keep in mind, the Physical Inventory works one batch at a time. One batch meaning one physical group of inventory. This could be, for example, a rack of 8×10 rugs, a pile of 4×6 rugs, a room full of sample pieces, or a batch dedicated to items hung on the walls. Whatever the case may be, you need to keep these items in one physical location through the entire duration of the inventory. Moving an item across the showroom can be catastrophic, and you’ll be spending more time chasing things down than actually getting things done.
Ready, Set, Scan!
Now that your inventory has been organized, you can begin entering items into the Physical Inventory module, batch by batch. Each batch should be as small as possible, recommended to be less than 100 items in each. This way, if you have an exception (such as an item sold), you don’t have to back-track quite as far to find it.
After each batch is entered, you would then do a comparison. This will look at each and every item you’ve entered so far, and check the status of those items in your RMPro system. If, for example, you entered an item, but that item shows in RMPro as sold to a customer, you will see an exception. An exception could be for any reason though. Maybe it’s at the wrong location? Or suppose a customer took it on approval, returned it, but nobody every entered the return?
Whatever the case may be, doing a comparison will bring these issues under the light for you.
Okay, I’m Finished. Now What?
At the very tail end of doing physical inventory, once you are 100% confident that you have entered every possible item you have, then you will finalize your inventory. This is what will show you missing inventory – items which RMPro says you’re supposed to have in-stock, but were never entered into any batch. Also known as the dreaded word “shrinkage”. In my experience, I’ve never seen an inventory taken which was 100% perfect with no exceptions the first time. In fact, it’s quite normal to see 100+ items show up as missing – usually because a certain group of items were forgotten. At this point, you’ll have to tie these items down and figure out what happened, and make the necessary corrections.
I Have Inventory Missing!
In the unfortunate event that you do have items missing from inventory, you’ll want to remove them from “In-Stock” status. To do this, we recommend creating a non-taxable customer named “Shrinkage” along with the date of the inventory. CONSIGN all of the missing items to this customer. Then, in case you find any of these items in the future, you can simply return them from this customer. Further down the road, when you’re sure you’re never going to see these items again, you can convert these consigned items to “Sold.” Use “Write off” as the payment method on this invoice.