Inventory in stores has two significant movements – into and out of the premise. That is a simple way to look at the inventory process. A deeper look will reveal several inventory management practices behind the two movements such as controlling stock purchases, prioritizing product acquisition, and forecasting demand. The core activity that paves the way for effective inventory management is stocktaking. And it is best done with a retail management software application.
Stocktaking is an essential process that helps determine the number of products in the store. Everything is in order when the physical items match the products in the records. Inspecting and calculating the total number of items in the inventory can be daunting – even more so, when the store is mid to large scale. That is the challenge of stocktaking products at a stretch. The more time-efficient alternative is partial stocktaking.
In this post, we go over the definition of partial stocktaking and the reasons it is effective. Then, we briefly discuss how a retail management software solution helps collect stock data accurately.
What is partial stocktaking?
Partial stocktaking is otherwise also known as cycle counting. It falls under the auditing process. The stocktaking method focuses on evaluating critical inventory first and the rest later.
Partial stocktaking is an inventory estimation technique in which retailers count stock in bits over a period of time. It can be on a daily, weekly, or monthly basis. This approach to stocktaking is different from counting stock in one go. The latter is immensely time-consuming and also opens up room for errors.
There are several benefits to adopting the partial stocktaking strategy. They are:
- Regular operations face lesser disruptions
- Errors reduce drastically
- Time and cost-saving
- Effective inventory purchase decisions
- Increase in sales
The cycle counting system
Let’s take a look at the different ways retailers can implement the cycle counting system.
Inventory counting by season
The demand for products can vary depending on what season it is in a year. Some items spike in sales during summer and dip during winter. Take tank tops, for example. Close to December, they barely sell. Around July, tank tops trend. Taking stock of items by season is an effective way of understanding products to prioritize purchasing.
Systematic stocktaking
Besides counting by season, retailers can fragment the partial stocktaking strategy based on an organized system. The categorization of products in the store enables partial counting. Categories can include brand, size, and product location on the floor. Retailers can pick a product category to count systematically. It bolsters accurate inventory estimation.
ABC analysis
The next partial stocktaking method is the ABC inventory analysis. By this approach, retailers group inventory items into three buckets – group A, group B, and group C. Group A consists of products that make up the top 20% of sales. Group B consists of items that make up the next 60% of sales. Group C consists of the rest 20%. Implementing a cycle count frequency based on each group’s importance underpins accurate stocktaking.
How retail management software aids accurate cycle counting
Retail inventory software solutions streamline the cycle counting process with cutting-edge modules and integrations.
Counting inventory by visual estimation is manually intensive. And because of that, the process can be slow and prone to errors. Retail management software tackles this problem with:
Barcode, NFC, and RFID integrations
POS applications can generate barcode tags. Sticking them on products allows employees to instantly retrieve product information during audits. Likewise, NFC and RFID integrations also aid inventory tracking by monitoring products on shelves in real time.
Reports generation
Purchasing inventory that is in demand is critical for efficient sales. Purchasing low-demand or no-demand products can lead to the accumulation of dead stock. Retail management software solutions crawl through inventory and transaction data to reveal product uptrends. Retailers can use that information to prioritize purchases and improve conversions.
Conclusion
Whether retailers choose to count full inventory or adopt a cycle counting system, retail management software applications simplify stocktaking. The automation features eliminate errors and reduce auditing time significantly. Are you looking for the best retail management system? Get SmartPOS. It is the leading cloud-based inventory management system for managing various retail operations including inventory management with speed and precision. Reach out to us to know more.