A very common complaint from end-users is that they can’t trust the computer to deliver accurate Qty on Hand information. They don’t trust the computer. They would rather walk out to the storage area and look before they commit delivery to a customer.
Yet is seems so simple: Receive into Inventory and the Qty goes up. Sell out of Inventory and the Qty goes down. So what is the problem? 99.9% of the time it is a human problem.
a. Wrong Items are entered. (+ or -)
b. Wrong quantities are entered.
c. Receiving to the wrong Location or SKU.
d. Item Usage not being recorded.
e. Location Transfers not getting entered.
If you are doing “write down” of Inventory each year, the real problem is that usage is not getting recorded as you go. So at the end of the year during a physical a big discrepancy is discovered and COGS takes a big one time hit to make it right. I submit to you, it is better to catch it early and fill the leak.
If you are doing “Cycle Counting”, let me recommend Cost Control’s “Automatic Cycle Counting” Granule. This Granule will enable you to spot problems much earlier. Don’t wait until year end, do a weekly quick count of the next 40 items. Let Auto Cycle Count tell you what items need to be counted, do the count, record the adjustment, and then try to figure out why there were any discrepancies.