Physical counts of inventory are an important part of any business. They provide accurate stock numbers that ensure companies have enough product on hand to meet customer demand and don’t risk losing out on sales due to stockouts.
A physical count of inventory is essentially verifying the quantities of items in storage by actually counting each item manually, whether it’s done in-house or outsourced to a third-party supplier. Conducting physical counts should be done at regular intervals throughout the year (such as quarterly or bi-annually) and can take anywhere from hours for smaller companies to days for larger ones, depending on the size of their inventory.
Having an accurate physical count of your inventory gives you the ability to make smarter decisions about ordering and reordering, as well as pinpointing any discrepancies between actual stock levels and what’s reflected in the books. Plus, it ensures that all products are accounted for when it comes time to file your taxes. In short, conducting regular physical counts of your inventory is essential for running a successful business.