Cycle Count Inventory
First check with your auditor to see if they will accept cycle counting inventory.
Then, sort your inventory into three classes:
- A- Expensive (or critical) inventory
- B- Less Expensive (less critical) inventory
- C- Inexpensive (non-critical) inventory
Count your A items on an on-going basis 4 times a month.
Count your B items once a month.
Count you C items once a year.
You can weave this activity into your usually warehouse operations during slower times of the day, month and year. This allows you to achieve inventory accuracy at a far lower cost than what a year end physical inventory. It also will be less stress on you and your operation, with less over-time and time-pressure.
If your auditor’s sample count agrees with your book inventory, then your book inventory can be accepted. The benefits to this approach:
- Less stress
- Reduced labor
- Reduced handling
- No need for a physical year-end inventory count
- You will have a tight control over your critical and expensive inventory items