Back To The Basics With Inventory Management
As we approach the busy holiday season, now is a good time to make certain that you have an efficient inventory system in place. Whether you have just a few items or a vast array, inventory management is an important part of business. A properly structured inventory system can help with space management, order planning and cost savings. Inventory controls can also help you stay focused on selling the right items at the right price.
Inventory doesn’t have to be over-complicated. But it does need to be managed and reviewed regularly. Here are a few suggested items to focus on.
Tracking. It is essential that you have a process for tracking the numbers, but it shouldn’t be overcomplicated. Even the simplest systems allow you to view the amount of inventory in stock, track changes and make adjustments. Without proper management, inventory can easily get out of control and leave you guessing as to what happened.
Look for an inventory feature in your club management software, because it is often tied to your point of sale system, which allows you to easily enter which items are to be inventoried and track margins. You should be able to enter item descriptions, your cost, on-hand counts, inventory adjustments and reports.
Cost Savings. Knowing your daily sales is one part of the inventory process. Having a lot of product that doesn’t sell can tie up capital that could otherwise be used. Your inventory reports should show you all sales and adjustments (including received shipments) made for each product. This will allow you to track which products are not selling, slippage, spoilage and donations or giveaways.
Every change in inventory should be clearly documented. By tracking which items sell regularly (in high demand), seasonally and scarcely, you can order properly and make sure you aren’t carrying too much of the wrong kind of inventory.
Inventory control can also help detect and deter theft. If regular physical counts are taken and adjustments are documented, then unexpected changes will stand out like a strawberry in a bowl of peas. Keeping unpurchased products from walking out the door is always a savings.
Again, your club management software probably has the reports you need, such as margin and on-hand reports. With these, you should be able to clearly see what is going on and take the proper inventory action. Even the cheapest item can lead to unfavorable swings in margin.
Keep Proper Checks and Balances. Though it might sound silly, the person that enters adjustments, including received inventory, should not be the same person that does the physical count. An employee who has access to both can easily fudge the numbers, making items “disappear.” Make sure you have the proper checks and balances in place, including regularly reviewing all adjustments, monitoring cost of goods and margins, along with physical inspection of the inventory itself.
Controlling what goes in and out is the name of the game. Inventory is typically taken once or twice a month. This might depend on the amount of product that you have and the amount of time it takes to count it.
After each physical count is done and adjustments are entered, the inventory manager should be regularly reporting and pointing out all adjustments. Reviewing inventory history makes you aware of certain changes that might have otherwise gone unnoticed. Every adjustment should have an explanation and should be investigated further.
If you don’t currently have a formal inventory management system, look for built-in inventory controls in your current software, or call and ask if they have one. Make sure you are keeping a tight control of your entire inventory and have the appropriate systems in place. You’ll never truly know what your sales and profits are if you aren’t properly tracking the products.
Susanne Nauseda has an exercise science degree that she put to use in the industry for 10 years prior to joining Twin Oaks Software, where she has worked for the last 12 years. You can reach her at 866.278.6750 or at email@example.com.