Keeping an inventory is one of those tasks in your business that you probably hate. It will take a lot of time and energy to complete this, so you have to keep your patience ready and must know how to do it.
Inventory management is a very important key to the success of all kinds of businesses. It will help managers to track or control the flow of different items in your stock. If you don’t have a precise inventory totals you’ll have challenges on preventing spoilage, stocking up, identifying possible theft and reporting your taxes as well.
To prevent a lot of issues with your taxes and having the IRS (Internal Revenue Service) involved eventually, you must do this process effectively and keep accurate records of your profit and loss. Here are some ways on how to properly keep inventory:
Orient and be prepared for the inventory
Make sure that your employees have an idea about the inventory process. Inform them of its purpose and why you have to do it regularly. This will help them understand on why they need to do proper record keeping and reporting.
Also, find a good place with a good amount of space to do your inventory. Create a spreadsheet and take down all the products that you have in stock. Have this prepared and be ready for the next steps.
Start on a simple inventory system
If this is your first time to do it, then don’t get too excited to jump on the complex ways. Choose a system that would be easy for you.
In the spreadsheet, list the name of the product and how many of it do you have in stock. Also include how much have you paid for the item and how much was it actually sold for. Be sure that the document has a column for all the information that you need to trace. You can make an online search for sample inventory sheets.
After you made purchases or a new shipment comes in, update your list. Make sure that everything in the receipt that was issued to you is included in the package. Do it before you place the products on their designated containers or shelves to make sure that nothing has been missed.
After you close your business for the day, update your inventory list. You can also do this at the end of the week but you have to keep the records or receipts.
Make use of spreadsheet programs
Spreadsheet programs like MS Excel or MS Access could be your best friend here. Because you can set up an automatic computation on the fields or cells, you can quickly get a total of your profit for the day or week.
Be sure that you do this regularly to prevent problems in the future. Make it a daily habit to update your inventory everyday so will have less worries. With this, you can also help yourself or your accountant to prepare the tax reports easily.
Inventory processes may sound a bit complicated to starters but once you’ve grown with the habit of doing it every business day, you’ll be an expert in a very short period of time. Who knows, you might come up with an easier and a better time-saving method on doing an inventory? Just try to keep up with the good practices and you’ll see that business takes a lot of time, but it’s worth it.