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December 2003
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Issue #2
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December 2003
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Issue #2
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The holiday season is upon us, and this means end of year procedures for POSIM are close at hand.
Since most of you will have to take physical inventories within the next 30-40 days, this month's RWS spotlight is on tips for taking your physical inventory.
Using POSIM's built-in Physical Inventory function is the best way to take your physical inventory. It was designed to allow you to take a full store inventory or partial inventories (for a specific Vendor, or Department, or Style, etc.). At yearend, most people take a complete store inventory so that they can identify shrinkage or inventory errors made throughout the year (followed by running the On-Hand Report).
POSIM keeps a running total of the physical counts that you import into it, and keeps these counts in a "buffer file." Therefore, you can continue to import additional counts as your inventory progresses--it will add these additional quantities to the counts already imported into the buffer file.
Your on-hand quantities will NOT change until you take the last step of the inventory process [see the UPDATING section below].
The Physical Inventory screen is found in InventoryAnalyzer > Misc > Physical Inventory.
Taking a physical inventory is MUCH easier if you can complete it while your store is not open for business--this way you don't have to track which items are sold when, and if you counted them before or after that item was sold. You CAN begin the inventory at night after your store is closed, and finish it the following morning before the store opens. If you cannot do this, take advantage of the new Snapshot feature in POSIM 7.8
NOTE: Taking a physical inventory is MUCH faster and easier if you use a Portable Barcode Reader to scan your inventory. It eliminates human count errors and is much faster because the person scanning doesn't have to identify the items that they inventory...they just scan each barcode.
The accuracy and ease of your physical inventory is TOTALLY dependant upon your level of preparation. If everything in the store is prepped, your inventory will go quickly and smoothly.
These preparations include:
A. Make sure that all merchandise in the store is properly tagged/barcoded, and that the tag/barcode on each item is easily accessible for scanning or (if you are not using a Portable Barcode Reader) for counting. You don't want to stop repeatedly during the inventory process to dig around each item to find the tag/barcode, nor stop to print barcodes if they are missing on an item. This should all be accomplished during the preparation period prior to the day of the inventory.
B. You will want to go into POSIM's Physical Inventory screen and make sure that the physical inventory buffer file from your previous inventory has been cleared.
| If there is a count left over from your last inventory, you must clear it (by clicking the "Clear" button on the screen). In the example shown to the right, there is a count of 363 records that we need to clear before we begin our new inventory today. |  |
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C. If you are using a Portable Barcode Reader to take your inventory, you should have the complete system with you--this includes the Power Supply, the Cable, and the laminated reset sheet. And, of course, you should keep extra AA batteries available (if you have not replaced the batteries in your Tricoder recently, we recommend that you do so before the start of a new physical inventory). Also, you will want to make sure that the Tricoder does not contain any uncleared data from a previous inventory.
D. To keep your count/scanned files organized, we recommend that you create a folder on your Desktop for each physical inventory that you take. You can call this folder PHYS <date>.
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Then inside this folder we suggest that you create two additional folders: (1) a folder for the Word-or-Excel count documents (you can call it PHYS_<date>_WORD (or EXCEL); and (2) a folder for the text documents that you will need to import into POSIM (you can call it PHYS_<date>_text). Thus, the folders for this physical inventory would look like those on the left if I took the inventory on 1/1/04. | |
These are the folders into which you will be uploading your count/scanned files (see IMPORTING YOUR COUNTS section below).
E. Based on experience, we have found that it is easiest to divide your store into Sections and assign people to scan/count each Section separately. It doesn't matter what each Section is called (Section 1, Section 2; or Section A, Section B; etc.) as long as everyone involved in taking the inventory knows exactly where each Section is located.
Finally, many stores have successfully used a 'double-check' count. For this, a count of total units in a Section is done (ex: Section A contains a total of 68 pieces of merchandise). This count should be matched to the sum generated by adding the totals for each SKU of merchandise that is scanned (or counted) in that Section--ex: 14 pcs of SKU#1104, plus 23 pcs of SKU#2358, plus 1 pc of SKU#3247, plus 12 pcs of SKU#1453, plus 7 pcs of SKU#5133, plus 2 pcs of SKU#1126, plus 9 pcs of SKU#2073 = 68 total units. If the total unit count does not match the sum of the quantities counted per SKU, an error in either the hand count or the scanned count occurred.
If you are NOT using a Portable Barcode Reader, you will need to identify and manually count each item in your inventory. You can include this in your count by either: by (a) writing down each SKU number on paper along with the quantity for each or, preferably, by (b) using POSIM's Define-A-Report to print out lists of your SKU's and then write down the counts on these sheets. When creating these reports in POSIM, send them to Disk File, open them in either Word or Excel, and SAVE them in native Word or Excel format within your PHYS folder [see Point D in the PREPARATION section above]. Then print these reports out, and use these as your count sheets. When the physical count is complete, your quantities then need to be typed into these files that you placed in the PHYS folder.
If you ARE using a Portable Barcode Reader, you will simply scan the barcodes of all merchandise in each store Section, and then you will upload this scanned file into either a blank Word document or a blank Excel worksheet in your computer and SAVE them in native Word or Excel format within your PHYS folder [see Point D in the PREPARATION section above]. If you want to refresh your memory on the functions within the Portable Barcode system, we have a detailed recap of the Tricoder Functions and Instructions at http://www.rwsinfo.com/tricoder_win.html
We recommend that you verify that each PHYS file that you create/upload looks accurate to your eye. That is, every row should have 3 pieces of information separated by a tab (Word) or cell (Excel)--the code PHYS (all caps); the Item ID; and the Quantity counted. Thus, each row should look like this:
| PHYS | Item ID | Qty | |||||
Check each file to verify that the PHYS is in CAPS; that the Item ID (or UPC code) looks accurate; and that the Quantity looks accurate too. For example, if the Quantity says 3,201 and you know that quantity cannot possibly be accurate, now would be the time to go back out and re-count that SKU and change the quantity in this file before importing it into POSIM.
You CAN make manual changes into these Word/Excel files to correct these mistakes, and you can open and save these Word/Excel files as many times as needed to double-check their accuracy BEFORE taking the next step.
NOTE: The same SKU can be counted/scanned in multiple files...POSIM will automatically consolidate all counts for one SKU into one line as you import these.
Your final step before bringing these physical counts into POSIM's Physical Inventory function is to convert all Word/Excel files into tab-delimited text. To do this, open the Word/Excel file, and go File > Save As. Then click on the "Save File as Type" button and choose "Text (tab delimited)" in Excel, or "Text Only" in Word.
Save these files into the TEXT folder that you created within your PHYS Folder [see Point D in the PREPARATION section above].
Once you save this file in TEXT format, you should NEVER open it again before importing it into POSIM. If you realize that you made a mistake in one of your count files, go back to the native Word/Excel file, make the changes in THAT file, and then re-save it as text (replacing the one that had the error).
REMINDER: At the beginning of a new physical inventory, don't forget to verify that the physical inventory buffer file is empty--that no data is left over from the previous physical inventory that you took [see Point B in the PREPARATION section above].
You are now ready to bring the physical inventory counts into POSIM's Physical Inventory screen. Again, this screen is found in InventoryAnalyzer > Misc > Physical Inventory.
Import the files containing your physical inventory counts/scans by clicking on the Import button on this screen and selecting the TEXT files to import from the PHYS folder that you see up. These files are imported one at a time.
NOTE: You can import these text files as you go throughout the entire physical inventory process, OR you can import them all at the same time after you have completed counting/scanning your entire inventory.
The "No of records" count will increment as you import your PHYS files. Every SKU will count as one (1) record (no matter how many pieces of it you count, and no matter how many different rows or different files it appears in, each SKU will count as one record).
We recommend that you run the Unidentified Items Report EVERY time that you import a PHYS file into POSIM. That way, if there are any unidentified items found in that import, it is easier for you to identify the Section where the unidentified item was located (since you know which Section you just imported). You will then need to count/scan the corrected item and import that into POSIM. In the example below, one item is unidentified. Since POSIM doesn't recognize the Item ID/UPC code that was imported, it can't provide a Description, and obviously doesn't have an On-Hand count.
NOTE: POSIM's new Key Entry button makes it really simple to type (or scan) in a few items...ideal for adding the correct item(s) to replace the unidentified items mistakes.
CRITICAL: Do NOT click the Update button on ANY report before the end of your inventory. Make sure that you are clicking the REPORT button for all reports until the final step [see FINAL STEP section below]. There is no un-do if you mistakenly click the Update button, so be careful.
In addition to the Unidentified Items Report shown above (which you should be running after you import each PHYS file), there are two additional PHYS reports that you should run at the end of your inventory. These are:
The Count/POSIM Variance Report identifies all items where (a) POSIM recognized the ItemID/UPC code, and (b) where POSIM's on-hand quantity does NOT match the total quantity imported during the physical inventory...thus a variance. If your count and POSIM's on-hand quantities DO match, they won't appear in this report because there is no variance.
As shown below, this report provides the Description of the SKU's along with the variance quantity and the on-hand quantity, as well as how many pieces you are short/over in the Variance column (along with the cost of these variances).
In the example below, there are eight SKU's where our physical count did not match POSIM's on-hand quantity. Some were shrinkage (those with positive quantities in the Variance and Variance Cost columns...POSIM says that there are more pieces on hand than you counted); others were overage (where we counted more pieces than POSIM had on-hand; these are shown as negative quantities in the Variance and Variance Cost columns).
You should carefully review this report to see if there are any items showing as a variance that should not be there...for example, after looking at this report I now realize that I forgot to count some of these 8 SKU's because my backstock on two of them was in a drawer. I can add the quantities for these two SKU's to my inventory through the new Key Entry feature (or by scanning them into a new worksheet and importing this new file). I would then need to re-run the Count/POSIM Variance Report to get a corrected report. You would keep doing this process until you have accounted for all the variances to the best of your ability--at that point, the Count/POSIM Variance Report is an accurate list of items that need to be adjusted in POSIM to match the correct physical count.
We recommend that you save the final Count/POSIM Variance Report that you run to Disk File, as you will undoubtedly want to provide this report to your accountant.
The Missing Items Report identifies all items where POSIM's on-hand showed a quantity but you did not import any PHYS counts of that SKU into POSIM.
In the example above, POSIM is reporting that I didn't count any quantities for item SH1911 for which, according to the POSIM on hand quantity, I should have counted 2. The only possible reasons for this discrepancy are (a) I do have these items on hand and simply forgot to count them; or (b) these items are missing, and are shrinkage.
NOTE: if you do indeed have these items they should be added into your inventory-- POSIM's new Key Entry function is a great way to add these last few pieces into your physical count. And, of course, you would need to re-run the Missing Items Report again after that.
We recommend that you save the final Missing Items Report that you run to Disk File, as you will undoubtedly want to provide this report to your accountant.
The last step for both the Count/POSIM Variance Report and the Missing Items Report is to UPDATE each of these two reports. To do this, click the radio button to the left of the Report that you want to update, and then click the Update button. This will update POSIM's on-hand quantities...the on-hands for the SKU's in the Count/POSIM Variance will be updated to match your physical count; and the on-hands for the SKU's in the Missing Items Report will be updated to 0 (zero) pieces.
| REMINDER: | There is NO un-do to the Update step, so do NOT update until you are certain that you are ready to change the on-hand quantities on all items to match the quantities counted and imported into POSIM's Physical Inventory screen. |
NOTE: Each Update could take considerable time, depending on how many items it must update. It is not uncommon for each Update to take 15-30 minutes.
Again, do NOT update the Unidentified Items...this would create new Item Cards for these unknown items. Instead, make every effort to identify these SKU's during your physical inventory process [as noted in the IMPORTING YOUR COUNTS INTO POSIM section above].
Your final step in your Physical Inventory procedure is to run the standard POSIM On Hand Report. This report will now reflect the accurate value of your inventory based on the physical counts that you made (after you updated both the Count/POSIM Variance Report and the Missing Items Report).
NOTE: For additional information on the On Hand Report, check out our previous email at http://www.rwsinfo.com/posimreports/onhandreports.html.
And for those of you linking to an accounting package, you will want to run your AIM Inventory Adjustment Journal too.