Inventory Counting - 4 Ways To Count Your Inventory

Inventory Counting – 4 Ways To Count Your Inventory

Inventory Management
Business Inventory Check List Concept

Inventory counting is a crucial aspect of managing your order fulfillment process. Hence, as a business owner, you need complete visibility of your inventory. This is exactly where counting helps you, let’s dive into the concept of inventory counting and 4 ways to count your inventory.

What is Inventory Counting?

Warehouse Manager Doing Inventory

Inventory counting is nothing but the physical verification of the quantities in an inventory or a warehouse. By calculating the annual inventory count, you can determine your assets and debts. The purpose of this concept is to determine the actual inventory. Taking an inventory count makes it possible for a company to know exactly what stocks and sets it as, to locate all of it quickly.

Tracking Inventory

An organized system enables you to get a complete overview of your sales channels and keep you updated with how much stock you own and where it is located, especially if you have multiple warehouse locations.

Cost Control

You have complete access to information like which items are doing well and which ones are not worth selling anymore. This helps you to control your costs as you can choose to discontinue the sales of certain items.

Improved Shipping

With proper counting, you can never be out of stock with a particular product. You would know when to expect deliveries so you don’t end up keeping your customers waiting.

Planning and Forecasting

The software can be used to analyze the trends from well-performing stocks, you will also be able to predict what will happen means you can plan better for it.


How often should you count your inventory?

Warehouse worker checking inventory of stock on racks in a distribution warehouse.

As and when you are evaluating your inventory process, you need to decide how many times you need to carry out an inventory count and which type is important for you. If your company is processing fewer orders, you might not need to carry out inspections regularly.

Cycle counting

Cycle counting requires a well-computerized inventory system. Most retailers prefer using this as it is cost-effective and increases the accuracy of the count.  Annual counts can be hectic and result in more errors. The cycle counting method uses software to know your inventory and the store does not need to be closed when this is happening.

Periodic Counting

This method is slightly more systematic than cycle counting. Some businesses opt to perform periodic complete counts bi-annually i.e in every six months.  

Seasonal counting

The main reason for choosing seasonal counting is when there is product spoilage or change in seasonal trends.  

Annual Counting

An annual count is quite known in businesses that don’t use the regular cycle counting procedures or software.  Most companies perform yearly to rectify any mistakes made in the software.

Inventory counting is a critical part of any business. It can be time-consuming and painstaking at times but, any business cannot function without this. It needs to be planned well in advance and the raw materials and tools need to be prepared beforehand.

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