How to Inventory Property

Create an easy-to-use inventory form to account for warehouse property.

Setting up an inventory control system at your place of business where every piece of merchandise contributes to the company's profit or loss is critical to keeping your bottom line tight and transparent. Make the process as painless as possible by creating a checklist that's easy to read and complete, particularly if your company makes it a practice to hire outside inventory counters who are clueless about your physical setup and systems.

Things You'll Need

• Inventory form
• Stickers
• Tape
• Signs
• Computer

Instructions

1. Create an inventory form that's unique to your business. Include these four fields: Item name; stock, inventory control or property identification number; number of items attributed to that SKU number; and storage area location, particularly if you're counting a huge warehouse. Add additional categories to suit your business and merchandise setup.

2. Ask staff to move uniformly from left to right to take the count, beginning at the back of the warehouse. Explain how the inventory form is to be filled out. Give workers a mechanism for marking units once they're counted (red stickers, for example). Instruct counters to place a sticker on each unit when it's tallied. This will allow counters to add units to subtotals without having to recount an entire section of merchandise.

3. Cordon off sections that have been completed using rolls of tape to avoid recounting those merchandise segments. Hang a "Counted" sign in a conspicuous place on the taped shelves, pallets or other fixtures. Double back once the entire facility has been completed to make certain no segment of the project was missed.

4. Input the results of inventory sheets into a computer using an accounting or database software program. Compile the results to tally sub-units of property. If you're counting auto parts, for example, compute only the number of tires on hand, then the number of batteries, and so on. Compare sector totals to the universal merchandise count to see if they balance.

5. Locate the results of the last inventory taken once the complete inventory has been taken. Back out sub-totals from last year's figures to learn, for example, whether tire sales during the previous year match year-end sales figures. Identify missing units so accounting can write them off when taxes are filed.

6. Develop a long-term inventory policy if one doesn't exist. Mandate a regularly scheduled inventory at least once a year to tighten control on merchandise and act as a theft deterrent. Assign one person to oversee this annual ritual -- preferably a property management officer or the member of your warehouse team most familiar with your picking and packing system.

7. Budget for a scanning system to make future counts fast and efficient. Substitute hand-held scanners for clipboards and pens so inventory-takers can glide down aisles and capture SKUs by reading bar codes on packaging. You'll still need to cordon off sections once they're counted, but the time you save by buying scanners will be worth the expenditure.

References

• Environmental Protection Agency: Conducting a Records Inventory
• National Oceanographic & Atmospheric Administration: Inventory Fact Sheet
• Accuracy Book: Conducting a Physical Inventory?