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. Please note that only one inventory audit should be open at a time. For further details, refer to the Inventory Audit Limitations section.
Table of Contents
- Overview
- How to Perform an Inventory Audit
- Audit Reports
- Tips for First-Time Inventory Audit
- Inventory Audit Limitations
- 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
Populate Stock Items
Before you can audit your locations you must populate stock item data in your warehouse(s) and locations.
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. Refer below for instructions on adding new items to the warehouse.
To add new items to a warehouse, you have two options: transferring items from another location/warehouse or purchasing stock items via a purchase order. For detailed information on transfers, click here, and for purchase orders, click here.
Once you've purchased and received goods 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.
Note: Stock items with a zero or negative count are included in an audit.
To add items to a location, you can utilize transfers. For detailed information on transfers, please refer to this link. Transfers enable you to move items from a warehouse or another location, with updated information visible on the Status page.
Additionally, stock items may appear in your location if there's a recipe linked to a menu item sold there. Specifically, you can add stock items to a location by creating a menu with attached recipes and then assigning this menu to the desired location. These stock items will display with a zero count on the Status page if they weren't previously present at that location. For guidance on creating and attaching recipes, click here.
Changes During an Audit
It is recommended not to update stock items while an audit is ongoing. 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, it is recommended that you perform a new audit for those affected locations.
Should you need to make changes to the cost queue of a stock item during an audit, these changes will not immediately be reflected in the Unit Cost shown in the audit. You must click the Refresh button on the Audit page to update the stock items with any modifications to cost queues made in that location; this action is required for all affected locations. Note that expected counts will not update with a refresh.
Please note that you cannot add a new location to an already opened audit. If you wish to include a recently created location, you must close your current audit and start a new one.
How to Perform an Inventory Audit
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 try refreshing your browser as the database will take more time the more locations are available.
Enter in Counts Digitally
Click the Edit button 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.
- 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 the base unit of a stock item, and negative values are not permitted.
Printing a Physical Countsheet
You may print a physical countsheet of each location and warehouse on the Audit page. The counts from the physical sheet can be entered into the audit as described above.
To print your countsheet, select the locations and/or warehouses you wish to print and select Print Audit Countsheets from the Print dropdown menu.
Organizing your Countsheet with Storage Areas
To learn more about Storage Areas, visit the Creating a Storage Area section of the Viewing Inventory Status by Location article.
Finalizing 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.
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, then 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 will 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 audit locations that were included in the report. Items without an assigned inventory category will appear in the "Uncategorized" grouping.
INVENTORY AUDIT: LOCATION COUNT
This report is similar to the Audit Summary by Stock Item but will separate each report by location. You will find the location information on 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 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
- 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.
- 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.
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