Factors Leading to Poor Inventory Control

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Poor inventory control can be the result of many problems and bad practices. Customer and employee theft can reduce inventory without leaving a record. Lax policies and paperwork procedures can let products slip through the cracks and lead to loss. Insufficient overnight security can lead to large burglary losses. Rushing through checkout or improper point of sale use will also cause accounting discrepancies.

Customer theft

Customer theft is a major cause of poor inventory control. Direct customer contact with products can lead to shoplifting. Insufficient security and video surveillance can give customers an opportunity to leave a store without paying for merchandise. These unaccounted losses may not be noticed until an inventory recount has been done. Proper staffing and increased employee-to-customer interaction can help reduce these losses. Security tagging of merchandise helps to alert employees when stolen products are leaving the store.

Employee theft

Inventory losses can be caused by internal employee theft. Unchecked employee theft can lead to huge losses over time. Merchandise may not be properly checked in on arrival so that it will not be missed on recount. Employees are often aware of camera and security sensor locations. They might be able to deactivate sensors and turn off cameras, and these actions give them a chance to steal while concealing the evidence. Inventory counts can also be manipulated to cover up this kind of theft.

Policy

Unclear policies and disorganized accounting operations can lead to poor inventory control. Newly arriving products must be carefully documented and checked in to the inventory system. A sloppy paperwork system of new item check-in and sales receipts can cause confusion as to what the true inventory numbers should be. Well-kept records will give the inventory manager real numbers to work with when calculating losses and preparing orders. A system of standardized documents will keep real numbers on file, even when employee changes are made.

Overnight security

Inadequate overnight security at a store or storage facility can tempt burglars. Retail establishments and inventory storage units in any neighborhood can be targeted for an after-hours heist. Storing merchandise in accessible trailers or containers that are left outside may be all the invitation someone needs to steal it. Take the extra time every night to completely lock up all of your inventory or find a secure storage center to keep overstock.

Point of sale

Problems with point of sale software and user error can cause inventory losses at the register. Being in a hurry when using checkout software can cause items to leave the store without being scanned. Every employee needs to be properly trained so they can correct mistakes that can cause inventory errors. Small computing mistakes left unchecked can add up to big inventory discrepancies. These losses can be prevented by simply slowing down and carefully rechecking the printed receipt at the end of the transaction.

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