If your company’s inventory controls do not include a cycle count program, you should consider implementing one.  I know, I know, you maintain a perpetual inventory and you perform physical inventory counts at year end.  I know, I hear you; you haven’t had any major inventory issues in recent memory.  Why should you test count your inventory when you take a complete physical inventory at year end?  You maintain a perpetual inventory and you believe that all is well and controlled.  But in our experience, perpetual inventories can lead to a false sense of security!

Like everything else, perpetual inventory systems have to be tested.  Implementing an inventory cycle count program is a cost effective – down right cheap – enhancement to your inventory controls.  There are so many ways to create perpetual inventory system errors that they can’t all be listed on a sheet of legal sized paper.  So don’t get caught on New Year’s Eve with a physical inventory shortage that may have your lender make drastic adjustments to your line of credit facility.  That’s no way to start off the New Year.

Don’t panic, I have goods news.  Bourget and Associates can assist you in developing, implementing, and maintaining a successful cycle count program.  Team members of Bourget and Associates possess significant experience with inventory systems in a wide array of industries…from precious metals to bowling balls.  Inventories are complicated and differ greatly between companies.  That’s why we will design a cycle count program that is specific not only to your industry but specific to your company and to your inventory.  At Bourget & Associates, we do not take the ‘one size fits all’ approach to inventory.    

Alright, let’s back up.  For those of you who aren’t familiar with cycle count programs, here’s a definition.  A cycle count program is a process where inventory sections are counted by staff members on a periodic basis.  Inventory subsections can be specifically identified or randomly generated.  The process can be performed daily or weekly, depending on the type and amount of inventory you maintain.

Cycle count programs are a valuable tool that can be used to enhance the efficiency of periodic physical inventory counts.  Also, cycle count programs can identify inventory shortages, computer systems issues, slow moving inventory, and obsolete inventory on a timely basis.   Why would you want to wait for a year-end physical to find out you have a serious issue?  Maybe the new inventory manager you hired at the beginning of the year is not processing returns correctly, or maybe the updates you made to your inventory software module does not relieve inventory items with alphanumeric SKU numbers from the perpetual, or even worse, maybe your inventory is walking out the door.

Developing a cycle count program can be frustrating and a bit confusing.  How many items should we count each day?  Which items should be counted more often than others?  Which staff members should do the counting?  What to do if variances are found?  Engaging Bourget & Associates will provide you piece of mind knowing that we provide answers to all these questions and more.  By interviewing some of your key employees, reviewing your most recent physical inventory compilations, analyzing your current perpetual inventory system and reports, and evaluating your purchases and sales activity, we can provide a cost effective approach that will enable you to implement a successful program.

Give us a call and setup an appointment to meet with our experienced professionals to discuss your needs.  Call us at 401-769-6762 or email us at info@bourgetgroup.com.