Inventory Management 101: Performing Cycle Counts With Lightspeed

Inventory Management 101: Performing Cycle Counts With Lightspeed

At the end of the year, we all want to kick back with family, relax and enjoy the holidays…but if you’re a retailer, you also want to make sure your inventory levels are accurate for the start of the new year. 

Theft, damage and human error can all lead to inaccurate stock levels, so regular inventory counts are crucial to detect shrinkage. 

While one big inventory count at the end of the year can certainly give you an accurate picture of your true stock levels, counting every single item takes a lot of time—and not everyone has the resources to do so. This is why many retailers opt for cycle counts throughout the year to save time.

In this blog, we’ll go over:

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What is cycle counting?

First a little 101: what is cycle counting, and how does cycle counting differ from physical inventory counts?

Physical inventory counts involve counting every single product you have to get an accurate picture of your inventory. While these counts are comprehensive, they are prohibitively time-consuming, so most retailers only do them once a year.

Cycle counts, on the other hand, only count a portion of your inventory at much more frequent intervals. By regularly counting segments of your inventory, you can maintain inventory accuracy year-round. 

Some retailers do cycle counts quarterly, while others actually prefer to perform them daily (typically in larger stores). How often you do your counts will depend on the volume of SKUs in your inventory—the more products you have, the more frequent you’ll want to count. 

At the minimum, however, you should perform a cycle count once a quarter. 

 

Cycle counting in Lightspeed Retail

By using Lightspeed Retail to do your cycle counts, you can adjust your inventory levels as you go. Because your cycle counts will be saved in the POS, if you ever need to reference an older count, you can get that data with the click of a button.

Before you start counting, you need to decide what sample of your inventory you’d like to count. Two common methods involve employing control groups and random samples.

With a control group, you count a small selection of items several times in a short period. These items do not change from count to count; generally, big-ticket items are counted. This method is good for keeping an eye on a specific set of inventory items and identifying any errors in your process.

With random samples, you count a random selection of your inventory each time you run a count. Some retailers remove a product from being potentially selected for another count until all items have been randomly selected, while others allow for completely random selections from all items each count—which works best for you will depend on your store and processes. This method is good for getting an overall picture of your counts and shrinkage throughout the year.

After you’ve picked your inventory counting methodology, it’s time to get counting. Log in to Lightspeed POS to get started.

  1. Start a new inventory count by heading to Inventory > Inventory counts > New Inventory Count. Name your count and click save changes. If you have a multi-store account, make sure you select the right shop at this point.
  2. Do your count.

If you’re counting with a scanner: ensure your cursor is blinking in the Item Scan/Search field. Then, start scanning. As you scan an item, enter a number from 1 to 99 to adjust the count, based on the number of units of that particular item you have in stock. If you have more than 99 units of an item in stock, scan the item again to add to the count.

If you’re counting without a scanner: navigate to the Print Item List option in the menu on the left side of the page. Select your sorting method and print the list, then count your inventory and make notes on the sheet. 

Once you’ve counted all the items in your current cycle, return to the Print Item List page. Enter the ID and correct the amounts of each item as needed.

  1. When you’re finished your count, hit Reconcile Inventory.
  2. Click Shrinkage to view how much inventory was lost due to shrinkage.
Did you know? After you’ve completed your inventory counts, quickly check on any missed items using the Missed Items report. If you’re using a random sample method, the Missed Items report can help you determine which items to randomly choose from the next cycle.

 

Enhancing your cycle counts with Lightspeed Analytics

Lightspeed Analytics includes some built-in reports that can help you with your cycle counts. 

Use the Uncounted Old Inventory report to keep your stock accurate. If an item shows up on this report, it’s time to do a little investigating: does the item still exist or was it lost to shrinkage? 

This is a good report to run before you select the products that will be included in your cycle count.

To run the Uncounted Old Inventory report, follow these quick steps:

  1. Open Lightspeed Analytics and navigate to Sales and Inventory > Reports.
  2. Find the Uncounted Old Inventory report and select View Report.
  3. If you have multiple stores, find the store dimension under Dimensions > Multi-shop > Store. Add it as a pivot and hit run.

If you find a particular product’s stock levels don’t seem to be changing between cycle counts, run the Dusty Inventory report. If the product in question hasn’t been selling, it’ll show up here.

To run the Dusty Inventory report, follow these quick steps:

  1. Open Lightspeed Analytics and navigate to Sales and Inventory > Reports.
  2. Find the Dusty Inventory report and select View Report.
  3. If you have multiple stores, find the store dimension under Dimensions > Multi-shop > Store. Add it as a pivot and hit run.

 

Perform cycle counts at top speed

While you shouldn’t neglect the importance of physical inventory counts, cycle counting keeps you on top of your inventory throughout the year. More efficient retail management means fewer errors and less wasted time, so go forth—get counting!

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