Staci Americas Blog

Warehouse Inventory Accuracy: Why It’s Important and How to Achieve It

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Inventory accuracy – the degree to which the goods you actually have in stock match the quantities in your order management system – is hugely important to your business.

Why? Because inaccurate counts can lead to back orders and stockouts. Those, in turn, cause shipping delays, which make for unhappy customers, bad reviews and lost sales.

To avoid this, some companies purposely overstock goods, which may make sense, given current supply chain issues. But this practice reduces margins by tying up cash that could have been invested in new products, technology or marketing campaigns.

The goal is to hit that ‘sweet spot’ to ensure that you have what you need to meet your customers’ demands without overspending on excess inventory and associated storage costs. Good inventory management will help you get there, and good inventory management starts with inventory accuracy.


Keys to Inventory Accuracy

Receiving of inbound products is when a company’s goods physically enter a warehouse and are logged into the warehouse management system (WMS). Inventory accuracy starts at the point of receipt.

A good benchmark for inventory accuracy is 99.5%. To meet that standard, start with good receiving practices, which should include the steps below.

  • Compare each shipment against the items listed on its advance shipping notice to verify that you received the items you ordered in the right quantities. If there are overages or shortages, notify your vendor immediately.
  • Make sure all items received are in acceptable condition. Place damaged goods in a quarantine area to prevent them from inadvertently being made available for sale.
  • Use barcode scanning to facilitate faster and more accurate receiving into a WMS. Scanning is faster and more accurate than manual entry, allowing stock levels to be reliably updated in real time and reducing dock-to-stock time.
  • Once all receivables are unloaded, inspected and scanned, organize and store new inventory in the warehouse. 

While effective receiving helps ensure that inventory is properly introduced into the warehouse for eCommerce order fulfillment, discrepancies can occur if stock is misplaced, mistaken for another item or put in the wrong bin. So it’s a good idea to periodically reconcile the levels shown in your system by counting actual physical inventory.

Some companies may need to perform annual reconciliations of inventory as part of their financial accounting practices, shutting down their businesses until the process is complete. But ecommerce companies can’t afford to close their digital doors. The solution? Cycle counting.

Cycle counting means periodically verifying preselected portions of inventory at regular intervals (cycles). It’s an efficient and cost-effective way to ensure the ongoing accuracy of your inventory.

How often should you do cycle counts? That depends on how many SKUs you have, as well as your inventory turnover rate. For some items, once a year may be enough. For inventory with high turnover rates, you may want to perform counts quarterly or even monthly.


Need Help? Call in the Professionals

If you’re struggling to stay on top of inventory management and related fulfillment challenges, consider partnering with a third-party logistics provider like Staci Americas.

Staci Americas simplifies inventory management and order processing with a full-featured warehouse management system that integrates seamlessly with your online store and across all your sales channels. 

We monitor and report on a wide range of metrics, including inventory accuracy, order accuracy, on-time delivery and more, according to your requirements. You can receive KPI reports automatically or download them on demand through our web portal.

If you’re looking for a fulfillment partner that maintains high levels of inventory accuracy in a high-volume, high-turn fulfillment environment, talk to Staci Americas.


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