What You Should Know About Cycle Counting

What You Should Know About Cycle Counting

Inventory is the heart of every distribution and wholesale business, making inventory management of critical importance. Managing your inventory, however, can be quite the balancing act: monitoring incoming and outgoing funds to maintain stability. 

The majority of companies today conduct year-end inventory counts – a process that is both time-consuming and costly, especially if you need to use outside help, close down business while you count, and/or offer overtime to your employees.  

Cycle Counting: A Better Way

So, if you’re thinking there has to be a better way, you’re right – it’s cycle counting.

Cycle counting is the process of perpetual inventory counting, which means that distribution companies and wholesalers monitor products and supplies over small increments of time – daily, monthly, quarterly, etc. – instead of with one giant count at the end of the year. Doing so saves money and vastly increases the accuracy of your inventory information. 

The Impacts of Inventory on Your Business

Cycle counting and accurate inventory counts affect your entire business – not just the financial aspects.

For starters, accurate inventory numbers provide insights into trends that can, if you utilize them correctly, improve your bottom line. For example, you can see your most popular items versus your least popular items or compare your projected sales to your actual sales. These insights allow for better buying decisions and prevent excess inventory.

Good inventory management can also decrease the amount you pay in annual taxes. Since the government bases your yearly taxes on your physical inventory, less inventory equals less money owed.

Lastly, accurate inventory can affect customer service. With the right amount of product in stock, customer orders can be fulfilled quickly to avoid delays and back orders that lead to dissatisfied customers.

Does your business manage inventory effectively? If not, the experts at Southeast Computer Solutions can help! For more information on how to implement best practices to improve your inventory management processes, contact us today.

About Southeast Computer Solutions

Southeast Computer Solutions is based in Miami, Florida, and has additional operations in Mexico. For over 30 years, we have positively impacted the success of small and mid-sized businesses with effective business management implementations that improve our clients’ operations. We listen, we are accessible, and we care. Learn more by visiting our website or calling 305-556-4697.