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.
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.
This activity also helps you determine losses or gains in stock for the current tax year and plan stock purchases for the following year.
Going through all of your products yearly allows you to detect any theft or waste of stock and to take measures to remedy it.