Take the Stress off Counting Inventory
It’s important to have a handle on inventory. Regular inventory count will let the owner know which items are fast moving and which items are slow moving and adjustments can be made accordingly.
Inventory count can be a pain. That’s why it’s done once a year at tax time and not every 3 months which is recommended by accountants, bookkeepers and business coaches.
Set up the inventory on an inventory software system. When you purchase product increase inventory and when you sell the product decrease inventory. All inventory software come with reporting options and one of them is a report to count inventory.
The software works on a coding method. For each item you have to create a bar code or a home made code. Print these codes on a labelling machine or printer and stick the labels on the shelves. This way you will know if you are running out of products by just glancing at the shelves and inventory count will be less stressful and more accurate.
A client asked “why am I not making money” that is a million dollar question.
so, we sat down and reviewed the products he purchased and his markup.
Well, we found the markup is healthy but it’s still not enough to take care of overhead such as wages, heat, rent, telephone etc.
We added the *fixed overhead expenses to the cost of items he has for sale. We realized the sale price on product has to be increased in order to pay overhead and leave some money for the owner.
Take a look at your overhead and make sure you are considering them when pricing your inventory.
*Fixed overhead expenses are those that come every month. They are re-accuring expenses. Ex: Telephone, Internet, rent, wages, heat, security etc.
Inventory count is important as well as pricing your inventory to make a profit.