Tip #242 – Counting Your Inventory


Tip #242
Counting Your Inventory

Now that we’ve talked about inventory tracking, let’s talk about the first step you need to take to keep an accurate inventory.
The inventory count.

When should a full inventory count be done?
A full physical count is usually performed once a year, closer to the end of the year.
A physical inventory is needed to provide accurate accounting data and identify any differences between what is currently in your shop(s) and what is reflected in flowerSoft.
If differences exist, which is very likely, then adjustments should be made to get the flowerSoft inventory counts to match what is actually in your shop(s).

There is another inventory count called a Cycle
count.
A Cycle count represents a procedure to validate inventory quantities in flowerSoft through regular partial counts. Cycle counts can replace a full inventory count.
Cycle count frequency is determined so that every item is counted at least once a year.
A lot of companies perform counts to have all inventory items counted more than once during a year.
Cycle counts may be performed on a daily, weekly, etc. basis depending on business needs. In a flower shop

In terms of inventory, the IRS requires a business to state its inventory value to be declared on its annual tax return.
There is an expectation that inventory will be physically counted and the number of units will be multiplied by the cost of goods.
The IRS only requires that the inventory count be a done in a manner that produces an accurate result.

For small businesses, that maintain a small inventory like most flower shops, a single annual physical inventory count makes sense.
However, if your business maintains a large number of items in inventory, it may be more accurate to use a cycle counting method rather than one single large inventory.

As far as flowerSoft is concerned, both count methods are the same. You will either count all of your inventory or part of your inventory.

When an inventory count is entered into flowerSoft, the inventory history for those items will be deleted so that an item’s history will always start with its inventory count.

Needless to say, inventory counts should be done when you are not likely to be selling the item items that you are counting.
Either do the count after business hours or when you are sure that none of the items will be sold after they have been counted or before the count has been entered into flowerSoft.

The first thing to do in preparation of your inventory count is print an inventory count sheet.
The count sheet can be found by following this menu path from the main menu: M > I > R > L > C

Selecting option C will result in the printing of inventory count sheets for all your inventory items.
Please note that sets will not be printed on the count sheets, since a set’s quantity available is determined by the available quantity of its components.

After you count the inventory, you must enter it into flowerSoft. You do this by following this path: M > I > 6

Most of you will enter the count by using option B of the Physical Inventory Count menu.

If you do have items that can be scanned, you can still use menu option B and leave the item code blank. flowerSoft will then switch to option A and let you scan the items.

Before you start the count, flowerSoft will issue this warning…

If you are OK with this, simply answer “Y”es.

This is the inventory count screen when using option B. If you leave the item code field blank, flowerSoft will switch to option A…

Likewise, if you leave the UPC Code field blank, flowerSoft will switch back to option B.

So now, you take your actual physical inventory count that should look something like this…

and start entering the actual physical count into flowerSoft…

Please be aware that the inventory quantities are not updated at this point. flowerSoft is just collecting your physical count information.
You still should go through option C, which compares the physical count to the on hand quantities currently in the inventory file for the items counted.

This report will give you an opportunity to double check any quantity that seems to be way off before being actually updated in the inventory.
Notice that you can also use option D, which just prints the discrepancies.

Once you are satisfied that the quantities are correct, you can use option E to update the on hand quantities in flowerSoft with the actual physical count for those items…

Once you update the on hand quantities, not the available quantities, you can use the option to print the value of your inventory…

The inventory history of all the items included in the count will look like this…

So be aware that when you finalize the inventory count (option E above) the item’s inventory history will be deleted and a new history is started with the count.

 

 

 

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