Annual inventory counts are an important part of managing any automotive parts department. They confirm your inventory is accurately recorded come year-end and tax-filing season.
But regular counts throughout the year can be an effective way to improve management, uncover problem areas and identify ways to improve efficiency. Here are four reasons to consider a mid-year inventory.
#1 - Cost savings
Doing a mid-year inventory count can help you uncover issues in your inventory management systems that can reduce inventory shrinkage by highlighting patterns that may be more difficult to spot after a year of transactions. It also provides more accurate data so that you can better forecast trends and turnover, which will reduce over ordering and obsolescence to free up capital.
And while doing multiple inventory counts a year can improve the accuracy of your records, if you have your inventory counted in the summer, then it’s not necessary to have your parts counted again at the end of the year. And that can mean added savings.
That’s because most auto dealers undergo their inventory counts at the year end, which means inventory management companies have a higher demand. During the middle of the fiscal year, inventory management companies have more time to serve customers and will typically offer discounted services.
#2 - Increasing your profitability
A physical count of your inventory will increase profitability, no matter what time of the year you undergo it. A count will ensure your parts are properly accounted for, that values are appropriately assigned and the parts department is organized and able to work effectively and efficiently. By making sure your on-shelf counts match your computer counts, you will increase the productivity of your employers and your business.
#3 - Improved customer service
There’s nothing more frustrating for a customer than work on their car taking longer than the initial estimated timeframe. It’s more than likely that you’ve been in a situation where you have promised to fix a customer’s car for a specific date.
This was because all the parts needed seemed to be in stock on your system, but you later found out that one of the required parts was missing. Perhaps it had been misplaced, used on another job or not properly allocated. Having your physical inventory and accounting system in sync will remove this worry and improve customer confidence in your business.
#4 - Unload parts before they become obsolete
Reviewing your inventory position and records multiple times a year can help you identify sales trends that could lead to more obsolescence. This will give you an opportunity to sell the parts before demand for them flat lines.
This may include accelerating sales through marketing and promotion when you reopen or reaching out to other shops and service centers to see if they need additional supply.
For more information on why a mid-year inventory count could be beneficial to your parts department, contact us today. We would love to help your business become more profitable through effective inventory management solutions.