Inventory Management: Year End Closing Procedure

I CAN'T KEEP CALM Its YEAR END CLOSING Poster | Esraa | Keep Calm-o-Matic

It is the most joyous time of the year, and the bustling seasonal sales will have many retailers smiling to the bank. While many celebrations are in full swing, it is also the season to count your inventory and prepare your year-end books, tax requirements, and financial statement. To make it easier for you, we have prepared some simple steps to ensure your year-long inventory management ends smoothly. Read along to find out.

Procedures

1. Post all omitted transaction for the year: 

The first step is to make sure all invoicing, sales and inventory transactions for the year have been entered and posted before you close the year. A premium retail point of sales software has a central database for collecting information about all the transaction that occurs in a store. So, going over things like purchase deliveries and everything in between or afterward is more practicable and a lot more accessible thereby, eliminating the need to operate manually. 

2. Reconcile inventory: 

Inventory reconciliation is simply the process of comparing your physical inventory count with records of inventory you have in your point of sales software. This process is necessary because it helps reduce stock discrepancies and put into perspective why these discrepancies exist in the first place. The simple steps of inventory reconciliation include; checking your physical inventory count, comparing counts with inventory records, and doubling down on discrepancies. 

3. Conduct a physical inventory count: 

One of the most stressful things about year-end inventory counting is finding a perfect time to take inventory count, especially during the busy holiday season. While shutting down your store can affect your store’s overall revenue, you can instead adjust your work hours and inform customers of any changes. Furthermore, it is necessary to make adequate preparation to have a successful audit. Get everything in order by creating space and labeling everything, as this makes it easier for products to become located. Also, distribute a checklist to ensure no inventory becomes overlooked during the counting. You can read more on how to have a successful physical inventory count here (Have you heard of these 7 Tips for Taking Physical Inventory Count | POS Shop Ltd (posshop-ng.com)

4. Print the Inventory Management Reports:

Most establishments tend to have a new year strategy meeting, where performances during the previous year will be brought up and discussed, and new strategies evaluated. So, having some reports printed is necessary as it helps with a projection for the new year. If you maintain a physical filing system, you can put up these reports in their designated files.

5. Back up:

Make a backup of all company data! Regular data backup is a necessity that should become overemphasized within your organization. It is so that you will be able to recover quickly should any data losses occur. Make sure your data are backed-up in secure, permanent storage that gives you a historical record of your organization’s financial position. 

6. Update your Inventory Record

Finally, remove from the record items that you will not be restocking. Update the cost of products to their current price. Doing this prepares your inventory list for the next year’s inventory management.

 

Are you looking for a way to make your year-end inventory closing process a breeze? ICG accounting module lets you streamline the way you organize and record transactions in your point of sale. Get started with a quick demo today. Send a request to pos@posshop-ng.com.