Now most of you have done a stocktake, why not use your POS Software stocktake reports to analyse the discrepancies in your stock figures?
Effective inventory management is crucial for the success of a retail business. Nevertheless, it can be challenging to monitor. A mistake made now often will not be noticed till next year.
Starting off
>Go to your stocktake section
>You will find reports showing the discrepancies (variances) in the stocktake.
>Highlight the discrepancies that have occurred.
These discrepancies will be due to many reasons, and to determine the cause, you need to know what is missing.
Some of the most common sources of discrepancies in retail stock inventory are:
Staff Theft
Retail studies almost always put it as number one. Please make no mistake. It is a severe problem. It appears motivated by various factors, such as dissatisfaction, revenge, financial need, or greed. For whatever reason, once an employee starts, they continue it.
- Stealing products: Employees might steal products from the store.
- Mate rates: Employees might not ring up goods that a friend or family member wishes to take from the store or falsely give their store discount to them.
Human error
Human error is another common source of inventory discrepancies. It can occur at any stage of the inventory process, from receiving goods, picking orders, entering them into the cash register and doing the stocktake. For example, in stocktakes, a person might accidentally count an item twice.
To prevent human error, you should implement robust inventory control procedures.
Inventory shrinkage
Stock theft, damage, and fraud by customers are all too common today.
Supplier errors and fraud
Supplier errors and fraud are another great source of inventory discrepancies that occur. It is all too common today for a supplier to deliver fewer products than what they invoiced. One of my clients just brought 3 lots of 100 gift sheets. The first lot had about 90, the next was about 87, and the last was about 95. The supplier stated that the lots were only approx, but why were they all under if so?
You should carefully review all incoming shipments and invoices to prevent supplier errors and fraud. They should verify that the products delivered match the purchase orders and invoices. You should conduct regular audits and reviews of supplier performance and contracts. One of the reports above is the stock discrepancies by suppliers. Supplier errors are a big problem with my clients. Some have told me the total cost of their point of sale system paid for itself by this saving alone.
Mismanaged returns
Mismanaged returns involve handling returned products without proper inspection, verification, or documentation. Retailers should have a clear and consistent return policy to manage returns effectively. You should inspect and verify the returned products for quantity. You should update the inventory system accordingly after processing a return. A good way of reviewing these figures now is to look for discrepancies by department.
Conclusion
You can find many problems in your stock control for less than an hour of work. These discrepancies are common in retail businesses but can be avoided or minimised by implementing effective inventory management practices. By identifying and addressing the most common sources of differences, retailers can improve their operational efficiency, customer satisfaction, and profitability.
