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How to Monitor Inventory for Discrepancies

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A good inventory management strategy is one of the keys to success for any business.

The importance of knowing exactly how many products are on the shelf and replenishing inventory can't be overstated.

In this post we'll discuss how best to monitor your inventory and what to do about discrepancies.

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Don't Stress When You Find Discrepancies

It's normal for business owner's to feel stressed when there are differences in inventory counts.

Most discrepancies boil down to human error. After all no ones perfect and when you put a human element into the equation you're likely to run into errors every now and then.

But don't get discouraged and give up.

The first thing to think about is what caused the discrepancies. Sometimes it's broken stock or error when inputting the counts into your inventory system. It could also be the result of using information from different sources.

Use Period Counts

You can use period counts to count ALL of your inventory at the end of a given period (month, quarter or year). They are very useful to help you track inventory levels and the best way of detecting issues with your current process since you'll be able to see how your inventory levels change over time.

As you get more comfortable with using the period count method it will become easier for identify and fix problems early on before they snowball into larger issues, such as running out of an item or taking in too many extra items that go bad (and end up costing money).

Use Cycle Counts

Another way in which you can monitor inventory for discrepancies is by using cycle counts. These are completed every day and help to ensure that each item has the correct quantity on hand at all times throughout a certain period of time (e,g., one week).

Cycle count reports will also indicate any items with low stock levels so they don't run the risk of being out of stock.

Most like cycle counts over period counts since not all of the inventory is being counted at once and instead cycles through the inventory going section by section.

Have a Process In Place for Your Inventory Intake

When you or your staff receive new product be sure that what is being input into the system matches the count received. If there's any discrepancy, contact your vendor to receive credit or have them replace the item.

It will be a learning process at first, but don't worry. After receiving inventory, any discrepancies should be communicated to whoever enters the product into your inventory system.

This will help ensure accuracy of all data associated with products or services sold by enabling up-to date information.


Monitoring your inventory is an essential operation for any business. When done correctly, it will help you reduce shrinkage and identify discrepancies so you and your business can adjust accordingly.

Once you understand how to monitor and identify issues with your inventory, you will be able to create strategies for quickly resolving discrepancies and maintaining inventory accuracy.

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