How to Perform an Accurate Monthly Inventory Report

Are you tired of constantly finding inaccurate inventory counts? Does it seem like your products have a secret life of their own, wandering off into the wild? Fear not, the world of monthly inventory reports can be conquered. Learning how to perform these reports with the accuracy of a seasoned mathematician (or at least, with the accuracy of someone who knows how to use a calculator) is easy. So sit back, relax, and get ready to turn your inventory woes into inventory wows for your organization! 

What Is an Inventory Report?

An inventory report is an essential document which provides a comprehensive account of a company’s physical inventory. It offers a detailed description of each item, including its name, quantity, location, and condition. If you need help creating one, you can find inventory report templates on the web! Check out this sample inventory report you can download to get you started. 

By analyzing this information, businesses gain a clear understanding of their inventory levels, track movement patterns, understand on-hand in-stock quantities, are alerted to out-of-stock items, and can make informed decisions about the amount of restocking and ordering needed. With this document on hand you have an understanding of your organization’s assets and the profits which come along with those assets. 

Importance of Inventory Reporting

Effective inventory reporting is crucial for businesses who want to operate efficiently and provide top-notch customer service. Keeping a list of inventory items on the shelves along with the details, sizes, and pricing, give you an invaluable document for your business.

Categorizing Inventory

By grouping products into categories based on attributes such as type, size, color, or use, you can better understand your inventory levels, and identify patterns. This is important when it comes to allocating resources within your inventories and keeping the most popular items on the shelf. Categorizing inventory also helps to streamline the ordering process and ensure that customers always have access to the products they need.

Inventory Tracking

By accurately tracking inventory amounts, businesses can avoid ordering too much of a product, which leads to excess inventory that takes up valuable storage space and may become outdated or unsellable. Conversely, businesses can also identify slow-moving or stagnant inventory and take steps to liquidate it, freeing up valuable resources and reducing carrying costs.

Better Customer Service

Accurate inventory reporting is not only beneficial for inventory management but also has a direct impact on customer service. Knowing what products are available and where they are located is essential for fulfilling purchase orders quickly and accurately, which ultimately leads to happy customers. When customers place an order, they expect to receive it promptly and without any issues. If a business does not have a clear understanding of their inventory levels, they may not be able to fulfill orders in a timely manner, leading to customer dissatisfaction and negative reviews.

Improved Forecasting

By analyzing inventory data over time, businesses can identify trends and patterns which help them predict future inventory needs more accurately. This prevents stockouts, reduces waste. And with a high quality of forecasting, you know the exact dollar amount you need to spend when you purchase new inventory from your manufacturers. 

Types of Inventory Reporting

There are several different types of inventory reporting businesses can use to answer their inventory questions and track their inventory levels effectively. Some of the most common types include:

• Physical inventory reports typically involve manually counting items and comparing the results to the expected inventory levels based on previous reports or order histories.
• Sales reports track the number of items sold over a given period, along with revenue and profit margins. 
• Order reports track the status of orders and provide visibility into the inventory levels needed to fulfill those orders.
• Reorder reports track inventory levels and provide recommendations for when to reorder products. 
• Forecasting reports use historical data to predict future inventory needs, allowing businesses to plan ahead and make informed decisions about when to restock and how much inventory to keep on hand.

By using a combination of these different types of inventory reporting, understand the difference between what inventory they have remaining and the minimum amount of inventory to purchase. These reports can be documented in any file format, and there are many softwares you can use to automate this reporting. If you are still doing manual inventory audit reports using Microsoft Excel and you’d like to update your reporting, let’s chat! 

How to Perform an Accurate Monthly Inventory Report

Here are the steps to perform an accurate monthly inventory report:

#1 Build Inventory List

The first step is to create a comprehensive inventory audit report which includes all of the products in your inventory, along with key information such as SKU numbers, descriptions, and current stock levels. This can be done using inventory management software, spreadsheets, or other tools.

#2 Establish a Timeframe

Next, you need to establish a timeframe for your inventory report. Monthly reports are common, but you can also choose to run reports on a weekly or quarterly basis, depending on your needs.

#3 Choose a Report to Run

There are several different types of inventory reports you can choose from, including physical inventory reports, sales reports, order reports, reorder reports, and forecasting reports. Decide which type of report is most relevant to your needs and the demand of your business.

#4 Run that Report

Once you’ve chosen the type of report you want to run, use your inventory management software or reporting tool to generate the report for the specified timeframe. This report should provide you with a detailed overview of your inventory levels, including how many items you have in stock, which items are selling well, and which items may need to be restocked.

How Often Do You Need Inventory Reports?

The frequency in which inventory report documents should be generated depends on the specific needs and operations of a business. In general, it’s recommended to perform inventory reports at least once a month to ensure that inventory levels are accurate and up-to-date. However, some businesses may need to perform reports more frequently, such as weekly or even daily, if they have a high volume of sales or perishable inventory.

Inventory Reporting Tips

Inventory reporting is a critical component of inventory management, and there are several tips businesses can follow to ensure accurate and efficient reporting. Here are three important tips to keep in mind:

Hire an Inventory Specialist

For businesses with complex inventory needs, hiring an inventory specialist can be a smart investment. These professionals are trained to manage inventory and ensure accurate reporting procedures are in place.

Keep an Organized Stockroom

Maintaining an organized stockroom makes inventory reporting more efficient and accurate. By ensuring products are properly labeled, categorized, and stored, it becomes easier to track inventory levels and avoid errors. An organized stockroom can also help reduce the risk of stockouts, overstocking, and lost inventory.

Audit Inventory Regularly

Regularly auditing inventory is another important practice. By performing spot checks or conducting full audits, businesses can identify discrepancies and correct them before they become larger problems. 

Key Takeaways

Congratulations, you’ve made it to the end of this inventory reporting guide! We hope you’ve gained a deeper understanding of the importance of accurate inventory reporting and how it can help businesses streamline their operations, improve customer service, and optimize their profitability. Remember, accurate inventory reporting is an ongoing process, and it requires regular attention and care. But with the right tools, practices, and mindset, you can turn your inventory woes into inventory wows and take your business to the next level!

Monthly Inventory Report FAQs

What Data Is in an Inventory Report?

An inventory report typically includes a comprehensive list of products or assets in stock, along with their descriptions and relevant details such as quantity and identifying information like serial numbers or SKU codes.

What Are the Methods of Reporting Inventory?

There are two main methods used when reporting inventory: periodic and perpetual. The periodic method involves taking a physical count of inventory at regular intervals and updating the inventory records accordingly. In contrast, the perpetual method involves continuously updating inventory records in real-time using technology such as barcoding or RFID. While the periodic method is simpler and less expensive, the perpetual method provides more accurate insights and timely information about inventory levels and movements.

How Do You Calculate Monthly Inventory Usage?

To calculate monthly inventory usage, begin by taking a physical count of inventory at the beginning and end of the month. Then, subtract the ending inventory count from the beginning inventory count to determine the total inventory usage for the month. Finally, divide the total inventory usage by the number of days in the month to determine the average daily inventory usage.