End of The Year Considerations For The Inventory Entrepreneur
At the close of the year, there are some big considerations that should be made, especially if you deal with inventory. Typically the end of the year is a great time to assess and recount your inventory to “square up”.
As you look back on the year’s counts and changes, it may signal to you that it is time to change systems, stay with the current plan, or outsource the process to the pros. Here are some major considerations that can play into how you manage your inventory for the next year.
Prepare for Taxes
We all know taxes will come along very quickly after the busy holiday season passes by. You will need to have accurate counts and an assessment of your inventory to prepare for your taxes properly.
Consider Any New Complexities
The review of how your year has unfolded will give you an idea of changes that need to be made. Have you added more products, warehouses or added more complexity to the supply chain in general this year? Things that may complicate counts and tracking are:
- Adding Third Party Logistics aka 3PLs - how are they sending you inventory counts? Are they accurate/up to date?
- Adding locations and/or warehouses - are you on top of the counts at each location?
- Online Sales Channels - are your online sales channels, including Amazon, updated to reflect any other inventory changes from other locations that the website may pull from (i.e. - you drop ship from a warehouse when you get a sale from your Shopify site)?
The more complex your sales channels get, the more likely you are to need a system in place that doesn't require too much manual entry.
Consider Your System and Process
The methods you have typically used to stay on top of your inventory counts in the past, may not work anymore. Do you use a complicated spreadsheet that gets burdensome now that you have additional SKUs and sales channels? It may be time to start using an official inventory management system, like DEAR Inventory Systems.
If you have a system you currently use, are you able to keep it up to date, or are you struggling to keep it updated? It may be time to reassess if it's a good fit for what your team can handle. Is your process allowing you to see monthly or quarterly updates? If you don’t have a handle on your inventory counts to offer functional decision making as it comes to projecting cash and reorders, you won’t be able to move forward with confidence to grow your business.
Are you happy with your system? If so, are you maximizing all of its features? It may be time to adjust your processes to match what the system can offer.
Clear The Clutter
With the close of the year, it is time to look at any facets of your inventory tracking that create clutter and extra waste; whether it is time, paper, expense, or manpower. Consider something cloud based, easily updated and something that can automate tasks that are bogging the team down and opening up the possibility of error.
Since most renewals of any subscriptions are monthly or yearly, the month of December is prime time to cancel subscriptions and assess if the ROI is there. Make changes that allow your time as a business owner to focus on sales and growing, not fiddling with a complicated, expensive system.
Ready For A New Year to Bring New Opportunities?
If you are ready for a new way of doing things, let's talk. Accountfully offers not only a slew of resources to help you maximize the success of your inventory based business, but we have an expert team that specializes in the numbers side of running an inventory based business. Outsourcing your accounting can truly help take a lot of the burden of trying to manage and understand inventory counts across multiple sales channels. After all, inventory is your biggest asset, let it work for you instead of dragging you down.
For more information on how we can help your unique business situation, tell us a bit about you here.
In the meantime, take advantage of our inventory focused resources:
- Download the eBook: The Inventory Handbook
- Download one of Our Inventory Based Guides
- Watch our CPG/Inventory focused podcast: The Month End
- Read our Inventory Entrepreneur focused blog articles
- Join The Accountfully Alliance groups on Facebook and LinkedIn