An inventory audit is an accounting process that documents a company’s total count of physical goods. While many may be frightened by the term ‘audit’, it’s an essential aspect of maintaining a healthy business. An inventory audit, in particular, is absolutely necessary for businesses to stay healthy and succeed. Any company with one or multiple locations that stock a large amount of physical goods such as clothing or hardware goods should be routinely audited.
3 Important Inventory Audit Objectives
When an inventory auditor comes to your business to begin counting, their main goal is to provide you a 100% accurate count of your physical goods. Once the counting is completed, you will be better able to assess the current state of your business. Let’s review some key objectives of an inventory audit.
Comparing Physical Counts to Business Records:Understanding what physical goods your business actually has versus what is logged on your company’s records will be one of the most important takeaways from your inventory audit. When counting is done correctly, an audit will reveal a 100% accurate picture of what you actually have within your company compared to the recorded inventory. This will help you understand whether your business is truly returning said profit.
Determining Effectiveness of Warehouse Procedures: An audit will also be able to reveal any problem areas within your company’s warehouse procedures, whether at the receiving dock or during packaging. Potential inefficiencies that could be discovered are disorganization of the warehouse and slow retrieving methods.
A business’ inventory audit objectives should focus on accuracy and effectiveness.
Highlighting Areas of Loss and Potential Gain: Knowing which physical goods or products are over- or under- stocked will allow you to stock your business more effectively and maximize profits. For items that are overstocked, you may task your merchandising team with ways to promote sales for these goods. For items that are understocked, you can now determine better buying methods to avoid shortages.
Finding The Right Partner
Understanding the key benefits of an inventory audit is a good start, but you’ll probably need to enlist the help of a third party to assist with realizing your inventory audit goals and objectives. A thorough inventory auditor can really take the load off of your employees by deploying their team of experts to do the counting. Not only will you gain an understanding of what your business’ physical assets really look like, but you may also uncover potential processes that are not fully optimized. Knowing what’s working and what’s not working is so important to making your in-store operations the most efficient.
The Reliant Difference
What sets our team of inventory experts apart is that we understand what works for your business and we tailor our services to your specific needs. We view ourselves as a top-notch inventory auditor with:
Founded as a family business in 1969, we’re proud to be leaders in inventory management services. Schedule a FREE 1-hour assessment to learn how Reliant Inventory Services can help your business, whether it’s one or multiple locations.