For businesses in India, inventory accuracy plays a crucial role in ensuring smooth operations and customer satisfaction. In fact, according to recent statistics, over 25% of businesses in India face inventory accuracy issues, resulting in significant financial losses. In this article, we will delve into the world of inventory accuracy, learn how to calculate and track it, and explore effective ways to improve accuracy. So, let’s dive in and discover how you can enhance your inventory management process and make your business more efficient.

You might even need to perform regular weekly inventory checks until you root out the cause of the discrepancy. The ideal inventory accuracy rate varies based on the industry, product type, and business requirements. However, sectors like pharmaceuticals or electronics might demand even higher rates due to their value and regulatory standards.

• Physical inventory counts work best when you complete them regularly.
• Cogsy checks your product movement in real-time and ensures accurate stock counts across all SKUs and storage locations.
• Knowing when to move those items helps you drive down operational costs.
• Remember that inventory valuation is the monetary value of your unsold stock at the end of a reporting period.
• If you’re looking for an operations partner to help improve your inventory accuracy, Cogsy has you covered.

If you have inaccuracies in your inventory records, you can experience inventory shrinkage. Inventory can easily go missing due to theft, damage, or pick errors. Errors in inventory data can disrupt order fulfillment, causing backorders and shipping delays.

Pick and Pack Warehousing for eCommerce Fulfillment

A thought leader in the field, Rakesh’s insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. You can even access a performance report that will provide an overview of the completed or missed deliveries by the purchases journal format calculation and example drivers. This way, you’ll have access to even the small, unnoticed things that lead to inventory inaccuracy. If a company has a large amount of damaged inventory, it should consider additional employee training and root-cause analysis to determine the source of the problem.

Your inventory accuracy rate percentage is calculated by dividing the actual stock count number by the stock count on your system and then multiplying the answer by 100. When items are not properly put back into inventory due to human errors, the return records will not match your actual physical stock. Some companies use digital records to record anticipated shipments of new products, labeling future holdings and products as in-stock before their arrival. If your records reflect that you’ve received an item when you actually haven’t, the discrepancy will complicate your inventory counts. When your records don’t reflect accurate holdings, you can overcount or undercount your actual products. The test score astounds the inventory manager, who has been focusing solely on quantity accuracy.

The last thing you want to do is promise a product for a customer, only to realize that it isn’t in stock. A study from Voxware found that 69% of customers are less likely to buy from you again if their order is not delivered within two days of the promised delivery date. However, where some go wrong is they use it as a method to track and repair mistakes merely. When items are correctly stored and easy to access, it becomes much simpler to count and track them.

Why Is Inventory Accuracy Important?

There’s nothing worse than guessing what your inventory is doing or when you need to restock. Thankfully, Cogsy takes the guesswork and self-doubt out of your inventory planning. Both strategies ensure that all inventory is counted on a rotating basis. This way, you can double-check for any errors before your next shipment heads out the door and proactively get ahead of any mistakes. That’s why it’s necessary to work with fulfillment partners you trust, who have a solid reputation and take responsibility for any missteps. The best way to prevent this is by documenting all your inventory losses as soon as they occur.

How to Calculate Inventory Accuracy rate

In addition to identifying shrinkage, inventory accuracy also safeguards your business against fraud. The trick is to identify and reduce these errors as much as possible. Inventory accuracy makes sure you have exactly the inventory you need to satisfy customers and prevent dead stock from accumulating.

Calculator: Inventory accuracy rate

As mentioned above, cycle counting is a type of perpetual inventory audit. When your inventory isn’t properly marked, this misinformation gets added to your inventory app and creates greater issues down the line. Most notably, it’ll cause your physical counts to differ from your inventory records. For instance, comparing stock records to your physical inventory will reveal whether you have inventory shrinkage (when your actual stock is less than the recorded balance). To ensure asset tracking data is accurate, businesses will need to develop some form of live inventory monitoring system. IoT sensors can be used to automatically scan assets as they move throughout facilities.

Use historical sales data and advanced analysis to predict how much of a product you’ll need in the future. This helps you plan your inventory better and adjust it when you expect changes in what customers want. In this article, we highlight what inventory accuracy means, why it matters and how to calculate it. We also cover potential issues to look out for and share our process to improve it. Calculate how much inventory you have in-stock with a physical stock check.

What is perpetual inventory accuracy?

The real-time tracking with locations through RFIDs improved the efficiency of picking, packing, and shipping. Without having the second dataset of manually confirmed inventory, you can’t measure the accuracy of your records. To have any concept of how accurate your records are, you need to count regularly and work to reconcile the data. You can choose Upper Route Planner to increase the delivery process efficiency and avoid shrinkages and shortages in your inventory. Periodic counts should be performed every two months or three weeks, depending on the size of the warehouse and the needs of the company. This provides more visibility than yearly or seasonal options, but it requires more time and workforce.