There’s a reason why there are over 700,000 inventory clerks found in the United States. Businesses rely on these professionals every day to make sure that their inventory is in stock.
Whether you’re a small business owner taking on the role of inventory, or a professional clerk, an accurate inventory report is vital for knowing your current stock levels.
But, exactly what is an inventory report? And how do you write one? If you want to know the answer to these questions, and more, you’re in the right place.
In this article, we’ll show you how to Small business inventory template organize your inventory reports in the easiest way possible.
What Is an Inventory Report?
Before we dive into how to make an inventory report it’s important to first understand exactly what an inventory report is.
An inventory report is a summary of all the items that a business currently has on hand.
It provides a comprehensive account of both the specific items in stock and the number of them. Inventory reports can be both physical documents and electronic ones.
Why are inventory reports important? Because they allow you to give accurate information to the customers. More importantly, they’re vital for your next purchase order of goods.
Without a good inventory report, you’ll likely have too much of something in stock. There are a variety of different types of inventory reports. The three main ones include:
- General inventory reporting – easy to read reporting that can be read by anyone and used for anything
- Business inventory reporting – used to show the description, location, and number of stock items in businesses
- Residential inventory reporting – often used by landlords to have tenants keep track of the condition of their property
In this article, we’ll focus on business inventory reporting. However, you can apply the principles to any inventory report. It’s important to note that no two inventory reports will be the same.
They can be of different lengths, or use different organizational systems. So, choose an organizational system that works for you.
But, to give you a rough idea of what the average one looks like we’ll walk you through the process.
1. Gather All of Your Inventory Items
The first thing you need to do is take stock of all of your inventory items. This will probably be the most time-consuming part of the process. But, it’s also the most important.
You want an accurate count of everything that is in your stock room. For the time being, don’t worry about organizing. All you’re doing at this stage is gathering everything that you have in inventory.
Make sure that you’re also including items that you sell, but are no longer in stock. Keep it on the report and write “0” next to the name. Remember that some businesses have multiple stock rooms in the same location or different locations.
If you have multiple stock rooms, assign each one a name. Then, make a separate list for each stock room. Make sure you’re as accurate as possible during this stage.
Otherwise, there will be mistakes in your report. The average business’s inventory is only 63% accurate. So, now is the time to distinguish yourself from the competition.
2. Organize Them (Leave Space for Description)
Now that you have all of the items in your inventory, it’s time to organize them into a list. You will need an organizational system to do this. Choose whatever works best for you.
Remember that you want a system that will make it easy to search for items on the fly. We typically recommend an alphabetical arrangement. You can also go by serial number or a similar classification.
During this time make sure you also leave space for a description to the right of the name. This is important because there are likely products that are similar except for minor differences.
For example, you might have a total inventory count for a type of shirt. In the description, you can list what types of sizes and colors are available.
That way, you don’t have to make a separate entry for each color or size. This is also a good space to list if the product is damaged or missing
3. Assign Each Inventory Item a Price
Now it’s time to list the price of the inventory. You can do this in a variety of ways. One way is to list the price that you paid for the inventory item. Or, you can put the price that you sell the item at.
You can also put the bottom earnings for the inventory item. Regardless of what you choose, just make sure that everyone on your staff understands what the price listed is referring to.
4. Add a Column for the Number of Stock That Remains
Next to the price you should put the remaining amount of items in the stock. It might also make sense to leave some room for additional labels.
For example, if you have boxes of pre-counted items, just list the number of boxes you have. You can also do this for items that come in pairs or dozens.
5. Fill Out Descriptions of the Item
At this point, you have the rough outline of your inventory report in place. The next step is to fill it all out. You can start with the descriptions of the inventory that you left space for.
During this time, you should also consider organizing your products into additional categories that you see. This will the process of counting them each week or month easier.
6. Decide on a Timeframe
If you want your inventory reports to be accurate you will need to be as consistent as possible. That means setting aside regular time to fill out the report.
The frequency of writing these reports will depend on your business. Some need to do it every week. Others can do it monthly or even yearly.
Regardless of how often you decide to do it, make sure that you write the date at the top of the report.
7. List the Number of Stock
Now, it’s time to fill out the number of stock you have in the space that you left blank. In some cases, you will need to use a unit of measurement here.
Also, make sure that you never leave a stock number blank. If there’s nothing left in stock, always leave a “0” instead.
8. Sign and Date It
Congratulations! You finished your inventory report. All that’s left now is to do a little housekeeping. First, make sure that you double-check your work.
Humans are prone to error, especially when doing repetitive tasks like inventory reporting. So, it’s worth it to make sure that everything you have is accurate.
Once everything is accounted for, it’s time to sign and date the document. This is to ensure that the report can be traced back to you if something is wrong.
How Can You Make Inventory Reports Easier?
In the past, all inventory reports were done on physical documents. But the world is changing. These days it’s more common to see them on electronic documents. Switching to spreadsheets for your inventory reports is a great option.
But, it’s not the only way to make your life easier when it comes to crafting these reports. We recommend investing in inventory management software if you want to take a more intuitive approach to catalog your inventory.
This is a fantastic option if you have multiple businesses that you need to monitor inventory. Or, if you have inventory found around the world. It allows you to track anything in seconds by following the inventory movement.
Best of all, you don’t need any complicated training to get started. Automating your inventory reports with software isn’t the only method either. You can also look into inventory report templates.
These outlines take all of the organization out of the process. All you need to do is fill it out. The only problem is that it’s not a great option for businesses that require a lot of flexibility with how they organize.
Enjoy This Article? Keep Reading
We hope this article helped you learn how to write an inventory report. As you can see, the process of making an inventory report is pretty straightforward. However, it still requires a lot of busy work.
The quicker you get a process in place, the more accurate your orders for the extra stock will be. That translates to better sales and better customer satisfaction.
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Vivek is a published author of Meidilight and a cofounder of Zestful Outreach Agency. He is passionate about helping webmaster to rank their keywords through good-quality website backlinks. In his spare time, he loves to swim and cycle. You can find him on Twitter and Linkedin.