This Simple Mistake Is DESTROYING Your Inventory
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- เผยแพร่เมื่อ 8 ก.พ. 2021
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When managing inventory you should keep an eye out for this bad practice that could destroy your inventory forever. I get phone calls all the time complaining about how no matter what the distributor does, their inventory on hand values are always wrong. To the point that they'll do a cycle count and a week later their inventory is inaccurate.
After months of brainstorming, tests and research, I uncovered that the issue lies in how the distributor inputs cycle counts/adjustments into the accounting system. This process in particular had created a100k discrepancy in one of my distributor's balance sheet. In short, they had created a physical inventory count for the day in addition to multiple invoices, credits, and inventory transfers. These transactions were physically created in a sequence. When the distributor went to enter the inventory count into the accounting system, they entered it in the completely wrong sequence. For example:
EXPECTED SEQUENCE
Starting Inventory - 100 Bananas
Invoices - 10 Bananas Sold
Expected Bananas - 90
Inventory Count - 80 Bananas Counted In The Warehouse
Inventory Adjustment = -10
Ending Inventory Value = 80
Actual Sequence
Starting Inventory - 100 Bananas
Inventory Count - 80 Bananas Counted In The Warehouse
Inventory Adjustment = -20
Invoices - 10 Bananas Sold
Ending Inventory Value = 70
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Thanks Brother Your Video is more helping for me
This is great advice and useful information you share so thank you!
Great video 👍🏼
Thank you!! Your videos really hits all the points and I have been using them in my new position as Warehouse Inventory Manager. Having the experience and your videos really help my company to minimize discrepancy in our sytem.
Appreciate you my brother :)
THANK YOU!
You're most welcome :)
This is good advice but really only applicable for paper based tier 3 wms systems, where on hand, allocated and available stock is not clearly stated in the system. This issue is compounded with multi location storage
Agreed
An if you have 6 thousand individual parts with different invoices and quantities... This is still the best way is it?
why would you give them both the invoice and adjustment? why not just the invoice?
I dpn't think you make adjustment without reasons or remarks in your report. So why?
An invoice should not be generated until the goods are actually picked, and the invoice should automatically create a decrease in the stock, it should not happen manually, that's just asking for errors.
I think he means already picked
But you don't make adjustments without reason or remarks.