Inventory how-to

How to audit your inventory

An inventory audit means checking that what your store system says you have matches what is actually on the shelf, then fixing the gaps.

Short answer: An inventory audit means checking that what your store system says you have matches what is actually on the shelf, then fixing the gaps. Do it in a structured sweep by location and SKU, not all at once in a panic. SteadyShelf does not run physical counts for you, but accurate counts make its forecasts and reorder suggestions much more useful.

Why counts drift from records

Stock records drift from reality for ordinary reasons: damaged items written off but not logged, theft, miscounted receiving, orders packed with the wrong item, or returns put back on the shelf without updating the count. None of this is unusual. The point of an audit is to catch it before it skews your reorder decisions.

Full count vs cycle counts

A full count means stopping and counting everything at once, usually once or twice a year. A cycle count means counting a small slice of your catalog on a rolling basis, for example your top 20 sellers every week, so errors get caught sooner and the job never becomes a huge event. Most small stores do better with cycle counts because a full count is disruptive and easy to put off.

What to check per SKU

For each SKU, compare the quantity in your store admin against the physical count, note the variance, and investigate anything large before you just overwrite the number. Check for unlinked variants, items sitting in a box that were never received into the system, and stock that is still recorded as on hand but was already sold through a channel that was not updated. Fix the root cause, not just the number, or the same error reappears next month.

Keeping it accurate going forward

An audit is only useful if the number stays correct afterward. Make sure receiving, shipping, and any manual adjustments go through one consistent process so the on-hand figure does not silently drift again. If you run multiple locations, audit each one separately since combined totals can hide a shortage at one site and a surplus at another.

Step by step

  1. Pick an audit method: full count a couple times a year, or rolling cycle counts on your top sellers weekly.
  2. Print or export your current on-hand quantities per SKU before you start, so you have a before snapshot.
  3. Physically count stock, location by location, and write down the actual number next to the recorded number.
  4. Flag any variance over a threshold you set, for example more than 2 units or more than 5 percent of stock.
  5. Investigate flagged items: check recent receiving, recent sales, and recent returns for that SKU.
  6. Correct the on-hand quantity in your store admin once you know the real cause.
  7. Note what caused each variance so you can fix the process, not just the count.

Worked example

A store sells a ceramic mug with 40 units recorded on hand. A physical count finds only 33. Checking recent activity shows a case of 5 was damaged in shipping and written off but never logged, and 2 were sold at a pop-up event that was not synced back to the store. The owner corrects on-hand to 33, logs the 5 as damaged stock going forward, and sets a reminder to update counts after any offline sales.

How SteadyShelf helps

SteadyShelf does not do stocktakes or cycle counts, so the physical counting and reconciling is on you. What it does do is use whatever on-hand number is in your store to calculate reorder points and order quantities, so an accurate count directly improves the quality of its suggestions.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

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FAQ

How often should a small store audit inventory

There is no fixed rule, but rolling cycle counts on your best sellers every week or two, plus a full count once or twice a year, catches most problems without becoming a huge disruptive event.

What should I do with the variances I find

Correct the on-hand number once you understand the cause, and write down the cause itself. If the same type of error keeps showing up, for example damaged stock not being logged, fix that process rather than just correcting the count each time.

Let SteadyShelf do this math for every SKU

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