Suggestions for Your Annual Physical Inventory

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  • Topic: Physical inventory, Inventory, Distribution, retailing, and wholesaling
  • Pages : 4 (1045 words )
  • Download(s) : 108
  • Published : January 7, 2006
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The business year will come to a close for many companies on December 31. An integral part of the closing process is the tedious and time-consuming annual physical inventory. Having endured just a few of these, I have the following suggestions to help make the process go a little smoother.

Send out notifications to all affected parties

Notify your suppliers that you will not allow deliveries while the physical inventory is in progress. Place a "non-delivery" notice on your purchase orders. Notify all transportation companies that regularly service your facility of the delivery and shipment restrictions. This will allow them to use their time more efficiently and they will appreciate your cooperation. Notify your auditors or accountants and arrange for count verifications by their staff.

Advise your sales people and customers of the shut down or non-shipment period. Publish a cutoff date for placement of orders to ship before the shut down.

Inform your employees well enough in advance to avoid a conflict with vacation schedules. This will also allow them to incorporate the tasks in their regular work schedules.

Print and distribute a schedule of all planned activities during the physical inventory. Make sure it lists who is responsible for each task.

Do some housekeeping

Clean up the storeroom area (sweep and remove all trash). Straighten up the inventory items for easy counting and make sure each item is contained within its assigned location. Avoid storing similar items in adjacent locations if possible. Make sure all items are clearly identified. Consolidate all quantities for the same item to reduce the number of locations wherever possible. Combine quantities into larger units for ease of counting (i.e. stacks or packs of 20). Make sure all storage locations are definitive and clearly marked.

Identify damaged goods and move them to a designated location or return them to the vendor for credit. Identify obsolete inventory...
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