Most distributors and manufacturers find that accurate inventory management is their most difficult ongoing task, regardless of the business software that they use. In fact, a surprising number of firms are still employing the time-honored “Go Back” inventory control method today. What is “Go Back” inventory control? It is the system employed by customer service
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There are three basic reasons why you may be relying on a “Go Back” inventory system: 1. Your software is either old or mismatched to your operations. Often times, the “work around” procedures required to maintain an accurate inventory count on an out-dated or mismatched software system are too time-consuming or unwieldy to maintain on
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Hold staff accountable for sloppy and inaccurate transactions. Many current accounting packages provide a wealth of history and audit reports that show, among other things, the user name for each transaction. Make it a firm policy that the user named in the report absorbs full responsibility for erroneous transactions – even if somebody else used his/her login. This simple policy will be effective in teaching people to keep their passwords secret and to logout of the system when they go to lunch, etc.
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Do you purchase all items through your software’s purchasing module? Do you formally receive your P.O. line items as provided for in your software? Do you then voucher invoices against received purchase orders? Disciplined employment of your software system’s purchase order-accounts payable vouchering procedures is one of the most important aspects of maintaining tight control over your inventory costs and quantities.
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Does your present system provide cycle counting functionality? Cycle counts have become SOP with a growing number of mid-sized firms since more business software packages now provide this functionality. The benefits of employing a cycle count regimen over periodic stock-wide physical counts are great. Cycle counts are less disruptive to operations, offer greater specificity in determining what items should be counted and generally force greater discipline into the organization’s inventory management.
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