Inventory Audits are a crucial practice for keeping your physical inventory in check. Clover Sport advises conducting a monthly physical Audit to track the movement of stock items within your business.
Note: You may only open one inventory Audit per day. Once an Audit is finalized, it cannot be reopened.
- Overview
- Before Starting Your Audit
- Changes to Stock Items During an Audit
- How to Perform an Inventory Audit
- Audit Reports
- Inventory Audit Limitations
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Inventory Audit Definitions
Overview
Inventory Audits enable you to input data from physical counts of your Warehouse(s) and Locations. This data can be used to update Stock Item counts at your venue and gather important reporting data. While our clients typically conduct Audits monthly, our system allows for daily Audits. All historical data is recorded, providing your team with a valuable history of stock item spend and variance.
Before Starting Your Audit
Ensure Stock Item Units and Inventory Categories Are Correct
Units of Measure and Cost
Ensure that your Stock Items have the correct Units of Measure before starting an Audit. For more information, click here.
If no Purchase Orders have been made for the stock item or if you are not tracking cost queue on the stock item, then Audits use the Default Cost assigned to the Stock Item to calculate the Total Inventory Value on Hand of the item.
The Default Cost represents the cost of the base unit, or the lowest unit that the item is sold by.
Once you start making Purchase Orders of the Stock Item, then Audit uses the Weighted Average Cost of the Stock Item.
Before starting an Audit, ensure that the cost is correct on your Stock Item.
Inventory Category
Be sure to assign the appropriate Inventory Category to each Stock Item as your Inventory costs will be reported by these categories.
Populate Stock Items
Before you can Audit your Locations you must populate Stock Items in your Warehouse(s) and Locations.
Stock Items that appear on the Inventory Status page are those that have been populated in the Location and are available to Audit.
- Note: Stock items with a zero or negative count are included in an Audit.
Warehouses:
To initiate an Audit of a Warehouse, ensure that the Stock Items are populated in inventory. You can verify the available items by accessing Inventory > Status and selecting your desired Warehouse. The items listed on this page are eligible for an Audit.
To add new items to a Warehouse, you have two options:
- Purchase Order: Receive Stock Items by submitting a Purchase Order of the appropriate quantities.
- Transfer: Transfer the Stock Items from another Location or Warehouse.
Once you've purchased and received or transferred Stock Items into your Warehouse, you'll see them updated on the Inventory > Status page. If you're launching our inventory system for the first time, please refer to the section below for Tips for First-Time Inventory Audit.
Locations:
Locations will also require Stock Items in the system to appear on an Audit countsheet. You can verify which items are in the system by accessing the Inventory > Status page and selecting your Location, similar to how you would for Warehouses.
There are two ways to add Stock Items to a Location:
1. Transfers: Transfers enable you to move Stock Items from a Warehouse or Location into another.
2. Recipes: Stock Items appear at a Location when a Menu containing Menu Items with attached Recipes is assigned to that Location. These Stock Items display a zero count until either you transfer in the appropriate quantities or finalize an Audit. For guidance on creating and attaching Recipes, click here.
Organize Your Audit by Storage Areas
If you assign Storage Areas to your Stock Items, your Audit Countsheet will sort the items under their Inventory Category and Storage Area. To learn how to Assign Storage Areas, click here.
Changes to Stock Items During an Audit
Once an Audit is opened, Clover Sport recommends not to make changes to a Stock Item. This includes any modifications to cost queues via Purchase Orders, Transfers in and out of audited Locations, and alterations to Counting Tags and other Stock Item properties.
Expected counts in these Locations are based on the counts shown in the Inventory Status page at the time the Audit was created. If the counts have changed and you would like the new counts to be reflected in the Audit, Clover Sport recommends that you perform a new Audit for those affected Locations.
Should you need to make changes to the cost of the Stock Item while an Audit is already open, you must click the Refresh button on the Audit page for each affected Location to reflect these changes in the Unit Cost shown in the Audit.
You cannot add a new Location to an already opened Audit. If you wish to include a recently created Location, you must cancel your current Audit and start a new one.
Note: Canceling an Audit will not save the data of the entered counts you already did. You will need to re-input all of the counts again on the new Audit.
How to Perform an Inventory Audit
1. Start the Audit
To perform an inventory Audit navigate to Inventory > Audits. Click on Start a New Audit to begin. Please note that you may need to wait up to 15 minutes before the database will populate your Locations on the Audit page. If you do not see them appear as in the image below, please refresh your browser as the database will take more time the more Locations are available.
2. Print a Physical Countsheet
You may print a physical Audit Countsheet of each Location and Warehouse on the Audit page. The counts from the physical sheet can be entered into the Audit as described in the next section (Step 3).
To print your countsheet, select the Locations and/or Warehouses you wish to print and select Print Audit Countsheets from the Print dropdown menu.
Example of an Audit Countsheet sorted by Storage Area and Inventory Category
3. Enter in Counts Digitally
Click Edit for the Location you want to enter counts for. Then enter the exact counts on hand for each Location by Units of Measure (UOM). When finished counting click Done.
- You can enter counts using any of the following UOMs: Counting UOM, Transferring UOM and/or Purchasing UOM. Note that it is expected behavior that the totals column will display in base units after selecting the Done button and reentering the edit page. The Counting Unit will be the Base Unit of the Stock Item unless you tag a different unit as the Counting Unit.
- You are not required to enter a count for every Unit of Measure (UOM). For example, for cups, you could have 3 "Sleeves" and 2 "Cases" entered, while leaving the "Each" box blank. Additionally, it's unnecessary to input zero counts for a stock item that already has data in other boxes.
- You are not required to enter counts for every stock item. If you leave all count boxes for a stock item blank, that item will not be included in the Audit report. This allows you to conduct a partial Audit for specific stock items at any Warehouse or Location.
- If you input a zero in any Stock Item's count boxes while leaving the others blank or filled with zeros, that item will be included in the Audit report indicating no stock available.
- You cannot input a count lower than 1 whole of the base unit of a stock item, and negative values are not permitted. For example, if my base unit is 1 ounce, I cannot input 0.5 ounce.
4. Finalize Your Audit
Once the count is complete, the Audit must be finalized. You have several options for adjusting inventory:
- Adjust All Inventory: Updates the counts for all stock items in the locations based on the actual counts in the Audit.
- Adjust only chargeables: Updates the counts for chargeable stock items in the locations based on the actual counts in the Audit.
- Adjust only non-chargeables: Updates the counts for non-chargeable stock items in the locations based on the actual counts in the Audit.
- Do not adjust inventory: Does not update counts for any stock items in the locations.
Select the inventory that you want to be adjusted and click Finalize Audit.
5. Download Audit Reports
The Audit module includes a built-in report feature.
To access the report,
- Select the boxes next to each location you wish to include in the report.
- Click on the Print > Print Audit Report button. This action will download the report to your computer as a PDF file. You can print this report at any time, even if the Audit is not yet completed or finalized. This allows you to gather valuable reporting data on partial audits.
All counts and reports are automatically saved in the database, allowing you to access your historical data whenever needed. To view Audits conducted in the past, simply select them from the Audit selection drop-down menu.
How to Read Audit Reports
Each Audit report will include an Audit Summary by Inventory Category, an Audit Summary by Stock Item, and an Inventory Audit: Location Count. We will describe each report below.
INVENTORY AUDIT: LOCATION COUNT
This report provides grouped reporting data for all Stock Items counted in the Audit. Each row groups stock items by their Inventory Category, allowing you to view total counts, inventory value, expected counts, and variance for each group. Stock Items without an assigned Inventory Category appear in the "Uncategorized" row.
If you'd like to learn more about setting up and managing your Inventory Categories, please click here.
AUDIT SUMMARY BY STOCK ITEM
This report provides detailed reporting data for all Stock Items counted during the Audit. Each row displays the total count, inventory value, expected count, and variance for every Stock Item included in the Audit, organized by Inventory Category. Stock Item counts reflect totals across all audited Locations that were included in the report. Items without an assigned Inventory Category appear in the "Uncategorized" grouping.
INVENTORY AUDIT: LOCATION COUNT
This report is similar to the Audit Summary by Stock Item but separates each report by Location. The Location is listed in the top left of each report. Each row displays the total count, inventory value, expected count, and variance for every stock item included in the Audit, organized by Inventory Category. Items without an assigned inventory category will appear in the "Uncategorized" grouping.
Tips for First-Time Inventory Audit
We recommend that you create a first-time entry of all of your Stock Items as Purchase Orders so that you can populate items into your Warehouse. From there, you can transfer Stock Items to their respective Locations.
Here's what you need to do:
- Perform a count of all current Stock Items at each Warehouse and Location at your venue. We recommend exporting your Stock Items from the Ingredients > Stock Items page so that you can get a list of all Stock Items in the system. Note any Stock Items you physically count that are missing from this export as those stock items will need to be created before proceeding to Purchase Orders in step 4.
- Determine the last cost you want to record for these goods.
- Set up all of your Suppliers.
- Create Purchase Orders for the stock items you need.
When creating a Purchase Order:
- Select the Supplier.
- Choose the Stock item(s).
- Set the price you want the system to use for these items. This will generate a cost queue entry reflecting the purchasing price. For more details on Cost Queues, click here.
Once your Stock Items are in the Warehouse(s), you can transfer them appropriately to each Location. Keep in mind that you should have received enough of the Stock Item to reflect what you have in your warehouse and what you have at your location.
Example:
For instance, if I currently have:
- 100 bottles of water in my Warehouse
- 100 bottles of water at Location A
- 100 bottles of water at Location B
I would create a Purchase Order (PO) for 300 bottles of water, reflecting the total I currently have in my venue. In this PO, I'll input the last price I paid for these bottles. When calculating costs for goods out of stock, the reporting system will utilize this price until more of the item is purchased.
Once I receive the 300 bottles in my Warehouse, I'll transfer 100 bottles to Location A and another 100 bottles to Location B. After this transfer, the Inventory > Status page will show 100 bottles in each area. At this point, I'm prepared to initiate an audit in the future with these goods on my Countsheet.
Inventory Audit Limitations
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Only one Audit can be open at any given time. When created, a record for that Audit will be recorded under the date that the Audit was started. It is not necessary to complete that Audit on the same date, but this Audit should be finalized before a new Audit is started. Please do not attempt to open a second audit while one is already active as doing so may result in data loss. The green "Start New Audit" button on the Audit module homepage will gray out and become unselectable if there is already an Audit in progress.
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Once an Audit is finalized, it cannot be reopened nor can a new Audit be started for the same day. If you finalize an Audit today, you will have to wait until the next calendar day in order to open a new Audit.
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Audit counts in the edit page for a location will not allow you to enter a count that is less than your smallest base unit. For example, if your smallest base unit for a liquor bottle was the bottle, you will be unable to enter a fraction/decimal less than 1 bottle in the Audit count. We strongly recommend using base units that are the smallest possible for your desired counting strategy.
- It is advised not to delete stock items while an Audit is open. Please finalize the Audit first to avoid issues where deleted stock items may still appear in the Audit and cannot be removed.
- Audits do not update expected start counts on your Standsheets. Standsheets expected start counts are generated from the previous event's end count, sales made between events, and transfers in or out pre-event. For more information on Standsheet columns, please click here.
Inventory Audit Definitions
Location - The location name
Item - The number of stock items the location has
Status - What percentage of items have been counted
Expected QOH - The expected quantity on hand
Audit QOH - The counted quantity on hand
Audit Value - The value of the counted audited items
Variance - the number of variance items
Variance Values - the difference of the Expected QOH value minus the audit value
Venue Totals
Audit QOH - The total audit quantity on hand
Audit Values - The value of the total Audit QOH
Variance Units - The total variance units
Variance Values - The total value of all variances