Master Your Inventory Cycle Count In 7 Steps

Every business owner should know that when inventory is under control and well-managed, things are going smoothly. Whether a business is a startup, a small or medium organization or a large conglomerate, inventory should be a top priority.

No matter how you run your business, you can’t get around the importance of proper inventory management and maintenance. One way to ensure a well-managed inventory is through inventory cycle counts.

What Is a Cycle Count?

An inventory cycle count is a process that requires you to count a small amount of your inventory at a specific time, usually on a set day, without handling your entire stock in one go. It’s a type of inventory auditing method that ensures your inventory is accurate and up to date at all times.

The purpose of cycle counting is to apply statistical analysis to understand your inventory. You’ll use statistical sampling to choose which items to count, helping you estimate how accurate your inventory records are without having to tally every item all at once.

In essence, an inventory cycle count is pretty similar to the physical inventory counts you’ve done, except it does so with a different approach. Instead of doing physical counts, you can delegate small portions of your inventory to certain employees on a predetermined schedule.

Why Is Cycle Counting Important?

Cycle counting is a way to verify the inventory you have in stock and reset any inaccuracies. Regular cycle counts can also help you notice which products or areas are most susceptible to shrinkage.

Steps for Warehouse Cycle Counting

How to Perform ABC Cycle Counting

1. Assign your inventory to classes: Your A inventory items are the most profitable merchandise.
2. Set a cycle count frequency: Determine how often to count your A, B, and C SKUs.
3. Randomly select items to count based on frequency: Count SKUs chosen through random selection every week.

How to Perform Control Group Cycle Counting

1. Select a few products in your inventory and count them.
2. Repeat your counts several times over a short period.
3. Examine your numbers and identify errors in your counting techniques.
4. Make changes until your cycle counting method is ready to roll out.

How to Perform Random Sample Cycle Counting

SKUs are randomly selected for cycle counting on a set schedule, such as every day or once a week.

7 Tips to Master Your Inventory Cycle Count

1. Do a Cycle Count at Least Once a Year

Having a schedule in place is crucial to ensure your inventory is always covered.

2. Prepare Your Warehouse Before the Cycle Count

Ensure that your warehouse is clean and decluttered. Get rid of dead inventory to free up space.

3. Focus on One Category at a Time

Divide your inventory by categories for easier management.

4. Set Up a Pattern to Get Through Your Whole Inventory

Consider working through your inventory alphabetically or by warehouse sections.

5. Keep Your Inventory Organized Between Cycles

Establish routines for warehouse upkeep to maintain order.

6. Sync Your Budget With Your Cycle Count

Make sure to budget for growth as your inventory expands.

7. Always Have a Plan

Have backup plans ready to ensure smooth operations during cycle counts.

Change the Way You Cycle Count With Finale Inventory

If you ever need help with inventory management or inventory practices like cycle counts, give Finale Inventory a try. You can begin a free trial today and learn about all Finale has to offer.