In this episode of the Inventory Nation Podcast, I’m chatting about the logistics of counting your inventory. End-of-year counts are typically very daunting and not a favorite activity.
In this episode, I’m introducing the concept of cycle counting. Cycle counting is an incredibly beneficial task and a key aspect of your inventory management strategy. First off, what is cycle counting? Typically when any inventory counting is mentioned, deep-seated dread and panic immediately come to the surface. If the very mention of counting makes you think of spending long hours (maybe even days!) at the end of the year counting pills, maybe even needles, until your brain is fried, you are not alone. Cycle counting is the opposite of this. With cycle counting, you count small amounts of inventory throughout the year. For example, with cycle counting, you can set up a schedule to count 2-4 products every day rather than counting your inventory for days at a time.
There are numerous benefits to cycle counting. First and foremost, it’s an excellent and efficient way to identify shrinkage in your practice. Shrinkage is any difference between what is on the shelf versus what your practice management system states. This can be due to something as small as a receiving error or as frightening as theft or diversion. Unless it’s a software error or another set-up error, that shrinkage is a potential loss of revenue due to missed charges, expiration, theft, diversion, and more. Cycle counting is helpful because if you are counting an item once a month versus once a year, you can identify any discrepancies more quickly and launch an investigation sooner.
The ultimate goal for creating a cycle count system and completing your end-of-year counts is to a) have a more accurate on-hand count in your PiMS on a regular basis so you can reliably know what you have and use reorder points, b) have the ability to catch missed charges, theft, etc more quickly and c) have an accurate count for your taxes.
With that being said, listen to this episode of the Inventory Nation podcast for my favorite tips when it comes to counting.