Keeping track of your business’s inventory is essential to its success and profitability. To help accurately account for what’s coming in and out, and what is stored in a warehouse or at an external storage facility, businesses need to reconcile their inventory records with actual stock levels—a process known as inventory reconciliation.
This process involves tracking inventory transactions, calculating quantity differences, and performing balance checks to ensure the accuracy of records. Read on for more information about why inventory reconciliation is important for the health of your business, and how you can go about doing it effectively.
Imagine an asset that, instead of contributing to a business’s success, costs it money without producing return, makes it harder to get an accurate picture of performance and otherwise hinders its success.
It’s a scary picture for any business owner or employee—and for many, it’s all too real.
Effective inventory management is one of the most important aspects of running a successful business. It can be the difference between having the right products in stock when your customers need them and being caught short.
Good inventory management means having visibility into your inventory levels at all times, so you can make sure you have enough products on hand to meet customer demand. It also means having efficient systems and processes in place to track inventory levels, so you can quickly and easily reorder products when necessary.
In my experience companies always had a need for Inventory Control and an annual inventory count during which all operations were shut down for at least 2-3 days. Even then there would a period during which records were being reconciled before operations could resume normal function.
On top of the annual inventory count there were ongoing manual cycle counts throughout the entire year. Dozens of people and departments were involved in this necessary, but extremely expensive, inventory controls requirement.