Year-end inventory is an annual activity every business should conduct. It does not matter if the business sells merchandise to consumers and other businesses or not. Every business needs to know how much paper, pens, batteries, equipment, and other supplies are in stock, in working condition, and how much has been used during the previous year.
According to the U.S. Small Business Administration, inventory needs to be well managed, which helps businesses reduce the amount of money that is tied up by having too much inventory. Inventory that is not managed well could result in internal theft and reduction in profits. Conducting a year-end inventory helps monitor usage, levels, and identifies any issues with shrinkage.
Here are some tips to help prepare for this year’s end of the year inventory:
Plan year-end inventory when it will not interfere with day-to-day operations of the business. It should be near the end of the year, but based on business operations, it might have to be conducted at the end of the fiscal year or shortly after the holidays have passed. Discuss options with others involved, and determine when to close the business for inventory.
Depending upon the business, taking inventory can include documenting what machines, equipment, office supplies, and other business necessities are on hand. Take notes on all pieces of equipment that rely on the use of batteries to operate. Document what batteries, and how many of each type are needed, and verify that there are enough back up batteries available.
Plan several weeks out to start going through and “spring” cleaning everything. Organize items based on usage, sales, and size. Keep all like items together and in categories, such as paper, front office supplies, back office supplies, merchandise to sell, and outdated/used items. Use whatever organization method makes sense for the individual business.
Label all categories and areas that need to be inventoried. Clearly labeled sections make it easier to determine where an item is located, and if something is wrong, it is easier to go back and recount the section.
Write up a list of instructions that will guide those helping with inventory process. This ensures that the process is completed according to business standards, and nothing gets missed.
Preprint a list of count sheets with items to be inventoried. Leave plenty of space for quantities, and to write in categories.
Taking year-end inventory is a great way to measure how many office supplies and merchandise has been used and/or sold during the previous year. Not only does it help you to understand how much inventory is needed to keep in house, but also helps identify any internal theft concerns and issues. A year-end inventory will help keep a business organized and ready for success during the upcoming year.
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