How Often Do Stores Take Inventory?

One of the most important moments for a retail business is taking inventory.

This updates knowledge about product assets on the shelves and in the back store. This process allows you to be compliant to laws. It also facilitates the work of your employees and reduces the risk of errors.

How often do stores take inventory? Most stores do their inventory once a year, at the end of their tax year.

However, some store owners do it more regularly if they feel the need to.

To let you know how often you should make inventory for your store, here are two questions that will be covered in this article:

Why take inventory of a store?
How to make inventory taking easier?

1. Why Take a Store’s Inventory?

You need to take inventory of your store for the smooth running of your business.

Doing it annually or monthly allows you to know the real value of your assets, prevent accounting errors and comply with laws.

Here are 4 reasons to take inventory for your store:

to control your stocks;
to know the real value of what you own;
to identify disparities;
to comply with legislative requirements.

Stock Control

Store inventory control allows you to know what you have for sale for your customers and thus not encounter unforeseen events.

It is important to have an up-to-date inventory, especially if you have an online store to display availability in real time. If you do not update it frequently, you may be selling items online that you don’t actually own.

Know the Real Value of What You Own

Sure, you need to know what’s in your inventory in terms of quantity, but you also need to know its value ($).

For tax reasons, knowing the value of your assets is very important.

Find the Disparities

If you can recognize the discrepancies and errors in your list of items, it’s easier to balance it. You can thus identify your deficits or overstock.

Comply With Legislative Requirements

Just like a citizen, your company must comply with local, provincial or federal laws regarding your taxation.

You must make your store management impeccable in order to meet these requirements and avoid future problems.

Why Take Inventory at the End of a Tax Year?

Stores do it at the end of their tax year so they can determine the value of their assets for tax returns.

Many retail business owners therefore take advantage of these circumstances to take full inventory of their store.

Taking Inventory Takes Time

This task takes a huge amount of time and resources depending on the size of your store. Therefore, doing your inventory once a year limits this action which requires a lot of time.

Planning

This activity also helps you determine losses or gains in stock for the current tax year and plan stock purchases for the following year.

Prevention

Going through all of your products yearly allows you to detect any theft or waste of stock and to take measures to remedy it.

2. How to Make Inventory Taking Easier

To make this huge task easier, there are several solutions for you. Equip yourself with technological equipment to help you count each item in an organized way and involve your team.

Here are 6 ways to make your inventory taking easier:

count every item;
use technology;
organize and categorize;
track what is accounted for;
involve your employees;
set a specific time.

Count Every Item

This must be obvious, but it is important to remind you to count the items in your store and in your back store in order to have a complete and exhaustive account of what you really own.

Do not only count your products on your shelves and what you can find in the back store.

Use Technology to Help You Take Inventory

Take advantage of the technological tools available to track your stock. You will save a lot of time and make the whole process more enjoyable. For example, use a of point of sale software to help you count the number of each item.

The Power of a Point of Sale Software to Take Inventory

A point of sale software is connected to a digital scanner to scan labels. This gives you a huge advantage to count items quicker and save you time that you can reinvest elsewhere.

Indeed, the point of sale software adds up each item when you scan them. You, then, don’t have to count them yourself!

Learn more about how a point of sale software can help your store.

Organize and Categorize

By organizing your products into categories and subcategories, you will increase efficiency and speed of the inventory taking. You won’t have to go back and forth to different types of products!

Follow-Up

When you take inventory, make sure to update it as you go and avoid counting the same item or product multiple times.

Involve Your Employees

If needed, you can mobilize a large number of your workforce to speed up the process and be more efficient.

Plus, this task will rally your employees around a common goal and update everyone’s knowledge to your store’s assets.

Set a Specific Time for Inventory Taking

Finally, establish a specific time when you will take inventory of your store. Do it annually at the end of your tax year and set a specific week or date.

The usual frequency for taking inventory of a store is once a year, at the end of the tax year. Generally speaking, stores conduct an annual inventory to assess inventory and ensure the availability of the store’s products. In short, the inventory is a key element of the management of a store and its frequency is determined according to the needs of each store manager.