Performing an Inventory Audit for Cannabis Retail in 5 Easy Steps
Do you want to maximize your profits and reduce shrinkage? Or perhaps empower your budtenders? Some of the most important data points for both goals will be revealed during the process of performing an inventory audit if you can do so regularly and in an efficient manner. Let us not forget that inventory audits are required by law. While the frequency and details of this reporting can vary by state or license it would be terrible for anyone to get fined or worse because of this non-compliance. Here are five easy steps to streamline and simplify your inventory auditing process to stay compliant and empower your business:
Cannabis Inventory Auditing Steps
Step 1: Designate a regular audit schedule
With cannabis retail store SKU counts ranging from 500 to over 3000 in a single store, determining a schedule will ensure your staff can spend more time serving customers. While doing a full inventory count at once is possible, to avoid shutting down your store or paying excessive overtime, we suggest you either designate certain days to count by Product Category or divide your store into sections to count on specific days. Lastly, performing audits during slower business hours can help to make the process even more efficient.
Step 2: Perform the Inventory Count
There are two standard ways, manual counting and Barcode scanning, to perform an inventory count and Cova facilitates both. The system also allows for bulk approvals and has pre-populated reason codes from integrated traceability systems.
Manual Counting is the first way, whereby you perform a physical count of items and enter them into your POS system. If you are performing a blind count, make sure to navigate to the Inventory on-hand report and filter for the items you want to audit.
Barcode Scanning is the second way, whereby a product barcode is scanned and automatically counted in your POS. While not necessarily faster, this method can reduce human error to improve accuracy.
Step 3: Save + Report Shrinkage
Once you have completed the full inventory count, you are ready to report to the regulatory body. Any discrepancies will need to have reasons alongside them. If you are in a market that utilizes a traceability system these adjustments and reason codes will be automatically populated, saving time and making the process even easier for your staff. Configuring your POS system with different levels of permissions can help to track authorized discounts and employee purchases to help cultivate a loyal staff and prevent internal fraud or theft at the store.
Step 4: Optimize Your Inventory
Now that you have reported your inventory to your regulator your team can get back to business and maximize your profits. The data within your POS system will reveal how products are selling along with trends around key performance indicators so that you and your staff can better understand the needs and wants of your customer. When you understand the metrics with which you monitor performance, you can work effectively with your staff to maximize those KPIs.
Step 5: Forecast Demand
The final step in this quick inventory management process is to utilize this data to anticipate customer trends and better fulfill their needs. We will do this through demand forecasting which is the process of using historical sales data combined with inventory data to calculate what products we anticipate customers will be looking for in the future. This forecasting not only ensures that your store is fully stocked for 4/20 but can inform your promotional calendar and help to better target customers with sales as well.
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With these 5 easy steps, you have just streamlined your inventory management process saving you both time and money. Now that all products and SKUs are accounted for and you have ensured you are compliant with your regulator you can get back to doing what you do best, building your brand and engaging your customers.
Book a Demo today to take your inventory management process to the next level with the world’s most advanced software solutions for cannabis retail.