How to Save Money and Work Faster When Doing Inventory Audits in Today's Businesses

June 30, 2025

In today's fast-paced business world, it's crucial to maintain track of your inventory accurately so you can make money, keep customers happy, and manage your firm smoothly. But many organizations still have difficulties with mistakes, shrinkage, and too much product because they don't check their inventory well enough. This book will show you the best ways to design and carry out an inventory audit, as well as how it may have a huge impact on your bottom line.

Why audits of your inventory are more critical than ever

An inventory audit is a planned way to compare the recorded inventory to the real inventory to make sure they match. You can't just count items; you also have to check for errors, make sure you have enough stock, and keep your money in order.

• The Inventory Management Institute estimates that organizations that check their inventories every three months enjoy a 35% decline in shrinkage.

• With the correct inventory controls, orders are filled 25% faster.

• Companies who use audit data to improve how they stock find a 20% increase in cash flow.

Whether you own a retail chain, an eCommerce firm, or a factory, a good inventory audit can identify theft, damage, or missing items.

• Don't have too much or too little in stock.

• Make predictions more correct.

• Help maintain financial records correct.

Step 1: Get ready and make a plan

Make sure you have a clear plan for the audit before you start counting boxes.

• Set goals for the audit: Are you checking for correctness, monitoring for shrinkage, or getting ready for a financial review?

• Choose the Right Way to Audit

• Full Physical Count: Very thorough, but it takes a long time.

Cycle counting is checking components of the inventory on a regular basis.

Spot checking is a great way to check things that are worth a lot of money or that sell rapidly.

• Assign people positions and tasks: Make sure that everyone on the team knows what they have to do.

• Make good use of your time: Schedule audits for times when business is slow so they don't get in the way.

• Let people know about the plan: Tell everyone who needs to know, from the finance department to the people who work in the warehouse.

Step 2: Do it the proper way

It's time to go to work and count.

Follow Processes That Are Well-Organized: Write down what you need and when you need to do it.

Use technologies like barcode scanners, barcode inventory systems, or inventory management software like NetSuite or Britecheck to make sure everything moves smoothly and promptly.

• Look for differences: Check to see if there are any disparities between the stock you expect and what you really have.

• Keep detailed records: Write down every step so you can hold individuals responsible and look back at them later.

Tip: Businesses that utilize inventory audit software say that inventory is up to 98% accurate. This helps them avoid running out of product or having too much stock, both of which cost a lot of money.

Step 3: Check the results and take action

After the count is over, it's time to gain some insights.

• Read the audit reports: Try to find patterns in the differences. Are there things that are always wrong? Are there losses happening in a given area?

• Find out what caused the problem: Don't just look at the statistics; find out why the mistakes were made.

• Do the appropriate things to make things better: Make things better by changing how they are done, retraining people, or improving storage and labeling.

• Make your strategies for optimizing your inventory better: Change the points at which you reorder, the time it takes to get things, or the deals you have with suppliers.

Aberdeen Group's research suggests that businesses who use inventory data to make big choices can make their projections up to 30% more accurate.

• Here are some tips for a successful inventory audit: Get Important People Involved The audit process is more complete when the teams in operations, finance, and the supply chain all work together.

• Make the same steps: It's crucial to be consistent. Make sure you have clear SOPs (Standard Operating Procedures) for counting, keeping track of, and reconciling your stock.

• Take advantage of automation: Use tools like Britecheck or Zoho Inventory to keep track of things automatically and make fewer mistakes when you enter data by hand.

• Set up regular checks: Regularity, whether it's once a month or once every three months, makes the data more trustworthy and holds people accountable.

• Use KPIs for Inventory: To keep becoming better, keep an eye on variables like inventory turnover, holding costs, and shrinkage rates.

Why You Should Check Your Inventory

Are you still not convinced if the work is worth it? Here are some perks that you can see in real life:

• Control of Shrinkage: Inventory shrinkage costs retailers more than $94 billion a year. Audits help lower that loss.

• Faster Order Fulfillment: When your inventory is accurate, it's easier to choose, pack, and send orders.

• Better Customer Satisfaction: No more faulty shipments or running out of stock.

• Better Reporting on Your Inventory: Keeping track of your inventory correctly makes it easier to keep track of your taxes and make sure your profit margins are correct.

• Operational Agility: Inventory audits show you what's going on right now, which helps you make decisions faster and better.

In the end, make sure that inventory audits are useful for your firm.

Inventory audits are a method to stay ahead of the competition as well as a way to follow the rules. If you do them right, they can help you reduce waste, improve accuracy, and free up working capital.

Regular inventory audits maintain your organization lean, adaptable, and profitable in a world where supply chains are getting more intricate and customers want products promptly and reliably.

Look at how you do audits now, use technology when you can, and put what you learn into action. What went wrong? A stronger bottom line, happier consumers, and a business that can do more.