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Last updated on 2024年4月15日

How do you conduct regular inventory audits and reconcile any discrepancies?

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Inventory accuracy is crucial for any business that deals with physical goods. It helps you optimize your storage space, avoid stockouts and overstocking, reduce costs and waste, and improve customer satisfaction. However, maintaining accurate inventory records is not always easy, especially when you have multiple locations, products, and transactions. That's why you need to conduct regular inventory audits and reconcile any discrepancies. Here's how you can do it in six steps.

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Brent Orms

Distribution Center Operations Supervisor at Eaton

1 Choose an audit method

There are different ways to audit your inventory, depending on your needs and resources. You can do a full physical count, where you check every item in your inventory against your records, usually at the end of a period or year. You can also do a cycle count, where you count a smaller subset of your inventory at regular intervals, based on categories, locations, or values. Alternatively, you can use a barcode scanner or RFID reader to scan your inventory and compare it with your records electronically.

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Brent Orms

Distribution Center Operations Supervisor at Eaton
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We would cycle count items daily in order to get all the inventory counted in a year. Numbers of SKU’s divide by working days in a month usually 22 days. This is how many SKU’s to count daily. Base that on how many counters are needed. Then compare counts to records, but do it daily. Start with A items, then B, and C.

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2 Schedule your audits

Once you decide on an audit method, you need to plan when and how often you will conduct your audits. You should consider factors such as your inventory turnover rate, seasonality, demand fluctuations, and staff availability. You should also avoid auditing during peak hours or busy seasons, as this may disrupt your operations and customer service. Ideally, you should audit your inventory at least once a quarter, or more frequently if you have high-value or fast-moving items.

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3 Prepare your staff and tools

Before you start your audit, you need to make sure that your staff and tools are ready. You should assign clear roles and responsibilities to your team members, such as who will count, who will record, and who will supervise. You should also train them on how to use the tools and follow the procedures. You may need tools such as inventory sheets, pens, calculators, barcode scanners, RFID readers, or inventory management software. You should also ensure that your inventory is organized and labeled correctly, and that your records are updated and backed up.

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4 Conduct the audit

During the audit, you need to follow the steps and guidelines of your chosen method. For example, if you are doing a full physical count, you need to divide your inventory into sections and count each section systematically. If you are doing a cycle count, you need to select the items to be counted based on your criteria and frequency. If you are using a barcode scanner or RFID reader, you need to scan each item and verify it with your records. You should also document any issues or errors that you encounter along the way.

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5 Reconcile the discrepancies

After the audit, you need to compare your actual inventory with your recorded inventory and identify any discrepancies. Discrepancies can be caused by various factors, such as human errors, theft, damage, spoilage, or misplacement. You need to investigate the causes and sources of the discrepancies and correct them accordingly. You may need to adjust your records, reorder or dispose of items, improve your security measures, or revise your policies and procedures.

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6 Review and improve

The final step is to review and improve your inventory accuracy. You should analyze the results and performance of your audit and identify any patterns or trends. You should also evaluate the effectiveness and efficiency of your audit method and tools and look for ways to improve them. You may need to change your audit frequency, scope, or technique, or invest in better tools or software. You should also communicate the findings and feedback to your staff and stakeholders and implement any necessary changes or actions.

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Daniel P.

I Lead an amazing team of Customer Support, Inventory, and Repair Associates to deliver top tier service to match the top quality products that we offer. Problem solving is the most rewarding aspects of my day-to-day.
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Attempt to identify specific areas or item categories that may require more attention. Increasing the frequency of cycles for those items or areas should help you identify the issue, or at the very least improve accuracy on a more consistent basis.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Brent Orms

Distribution Center Operations Supervisor at Eaton
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To add set a target for accuracy percentage, 95% and above is a good barometer to start with. Anything below 89% accurate start doing root cause Analysis to determine what is making the counts to have discrepancies. Ie…human error, damages, missing inventory, inaccurate inbound receipts and putaway errors.

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How do you conduct regular inventory audits and reconcile any discrepancies?

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1 Choose an audit method

2 Schedule your audits

3 Prepare your staff and tools

4 Conduct the audit

5 Reconcile the discrepancies

6 Review and improve

7 Here’s what else to consider

Inventory Accuracy

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