Give every item a fixed code and record every receipt, issue, transfer and return with a document in the system as it happens. The system then shows the real balance in each warehouse. Start by coding your items and taking an accurate opening count, then connect stock to purchasing and sales and set a reorder level for each item.
Step by step
- 1
Code your items
A code for every item and every size or color, with its unit of measure and supplier, and a barcode printed on the item or the shelf.
- 2
Start with an opening count
A physical count of every item in every warehouse before going live, because a wrong starting balance spoils everything after it.
- 3
Record every movement with a document
Receipts from suppliers, issues for sale, transfers between warehouses, returns and damaged goods. No movement without a document in the system.
- 4
Set reorder levels
A minimum for each item at which the system alerts you before it runs out, based on how fast it sells and how long supply takes.
- 5
Agree on the costing method
Choose the inventory valuation method with your accountant, so the cost of goods sold and your profit margin are correct.
- 6
Regular counts and reports
Regular partial counts of the most important items, and reports on slow-moving and out-of-stock items and on differences between the system and the shelf.
Allowing goods to be issued or received without recording them in the system right away makes the balance on screen differ from the shelf within weeks.
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