The end of the year is a delicate time in the world of business. It is a time to gather the final tax documents, scan the receipts and look for some last-minute deductions. It is also a time to review marketing campaigns and advertising strategies, doubling down on what worked during the past year and look for ways to do things better in the year to come.
Year end is also the perfect time to see where your business stands physically by performing a full inventory of your facility. No matter what type of business you are in, performing a thorough inventory will make your accounting more accurate, help you identify your hottest sellers, and get you ready for the busy year to come. Here are some practical tips you can use to get the most out of the year-end inventory for your business.
. Maintain accurate inventory counts in the days leading up to the inventory. Maintaining accurate year-end inventory counts is essential, and a good way to reduce write-offs. Marking down your remaining inventory can boost post-holiday sales and reduce the amount of unsold product you would otherwise have to carry into the new year.
. Conduct an annual year-end inventory audit. As a small business owner, you are responsible for the accuracy of your inventory reports. Keeping your inventory electronically is fine, but it is also important to reconcile those records with what is physically on your shelves.
. Understand the value of a physical inventory. Taking inventory is no fun, and that may be why so many business owners put it off. Conducting an inventory now can eliminate costly out-of-stock conditions later and help you avoid the kind of accounting errors that could trigger a tax audit.
. Perform an inventory check. You may be eligible for an additional tax deduction based on the results of your inventory check. If the value of your good has declined, you may be able to write down the remaining inventory and save on taxes. Always check with your accountant before taking action.
. Use an inventory management system. A quality inventory management system like EMS Barcode. Implementing an inventory management system now and using it to track sales, receipts, and breakage throughout the year will make your next year-end physical inventory that much easier.
. Set a convenient date and time. Think about your workflow and when business is at is slowest. You do not want to schedule your inventory on a day when you are very busy – you need to give the project your full attention.
. Organize everything and get the help you need. You could do the inventory on your own, but having help will make the process faster and more efficient. Choose the workers who are most familiar with your inventory; it will make the counting a lot less stressful.
. Set aside items that cannot be easily counted. Items without barcodes, open packages, and similar items can be addressed later after the main inventory has been completed.
Nothing can take all the pain and tedium out of your year-end inventory, but the above tips can make the process a bit easier. All businesses need to conduct some sort of year-end inventory, and the time to get started is now.