Annual inventory is generally performed at the end of each year's accounting period and is often required by the financial overseers of your church. While annual inventory is important for fiscal reasons, it's also essential for physically reconciling stock with your P.O.S. system.

However, many retailers are quickly realizing that an annual inventory is not sufficient to maintain accurate P.O.S. information. Just think of the processes and opportunities during which inventory counts could go askew: receiving, shelving, labeling, customer handling and misplacement, employee borrowing and theft.

A new method of taking inventory-termed cycle counting-is now being implemented by a wide number of Christian book retailers. Cycle counting breaks your inventory into logical, systematic sections. These sections then are inventoried on a scheduled basis throughout the year.

More active sections are inventoried several times a year, while other slower sections are counted only once-depending on which method of cycle counting you select.

One method divides the store's stock into physical areas or sections, which is currently the most popular method used by church bookstores. Many stores select this method because the store is already physically divided by departments, sections and shelving areas.

The second method divides the store into sections according to sales rankings. Some P.O.S. systems allow their users to rank individual items based on sales history and assign an A, B, C or D sales classification to each item. In this case, 80% of your sales that comprise 20% of your stock would be considered "A" items and would be counted up to six times a year; your slowest-selling items, know as "D" items, would only be counted once.

However, until a store becomes proficient with systematic cycle counting and has proven its accuracy, it will be necessary to continue with an annual inventory. The best time to start implementing the cycle-counting practice is immediately after a complete physical inventory has been taken. Doing so will help reduce the time it takes to conduct corrective audits on counts that do not match.

Even though annual inventory and cycle counting can be tedious and time-consuming, make sure you explain to your staff why both are important. A well-informed staff will do a more thorough job-and accurate knowledge of your inventory will result. With this knowledge in hand, your store can provide excellent selection and service that draws customers in again and again.

Bob Steele is a former consultant and trainer with more than 30 years' experience in the Christian products industry.

Read the complete article at http://www.thechurchbookstore.com/a.php?ArticleID=13231.