What are the Best Tips for Point of Sale Inventory Management?

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  • Written By: A. Preble
  • Edited By: Angela B.
  • Last Modified Date: 11 November 2019
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Inventory management involves maintaining accurate inventory records that can be cross-checked with actual inventory levels. Point of sale inventory management is an extremely important part of the equation. Without keeping track of merchandise that has been legitimately sold or written off, a business cannot be sure of how many units of product remain. External theft may be inaccurately estimated, and internal theft may go unnoticed. Methods for point of sale inventory management include use of computer software, use of a checks and balances system, and use of hard copy recordkeeping, all of which should be used in conjunction with back end inventory management.

The first thing to do for point of sale inventory management is to use a point of sale system for calculating inventory. An integrated system that tracks order placement, verifies receipt of orders and places inventory into the system is ideal. Individual items are scanned or entered at the point of sale, and inventory levels are updated on a daily basis and periodically reconciled with actual inventory.


This solution works well for large businesses, but smaller businesses can adopt a similar policy using a simple cash register, a pen and paper, or a computer spreadsheet. It may seem like adopting such a primitive system would widen the margin for error, but smaller businesses are usually closely held and have fewer employees; thus, there are usually fewer mistakes. Your point of sale inventory management system should match the scale of your business with regards to expense and complexity.

Second, employ a checks and balances system for inventory management. The same employees who process point of sale transactions should not be reconciling inventory data, for example. Eliminating the possibility of internal tampering will help ensure compliance with guidelines, because employees carrying out one task will have no opportunity at a later stage of inventory management to falsify documents that could hide any inconsistencies.

Next, double your point of sale inventory management efforts. For example, if your automated system logs damaged or otherwise written-off merchandise, put a hard copy system in effect, as well. Have employees write down every instance of damaged or written-off goods, and then compare the computerized tally with the written version. Adding another system of double-checks encourages employees to pay attention to all instances of loss. Ask employees to record the date, time and details of any instances of inventory loss. If questions of validity are raised, a paper backup will help sort out any issues.

Finally, point of sale inventory management should be presented to employees as a primary job responsibility. It is easy to forget that point of sale employees may not have much prior retail experience and may not understand the repercussions of improper inventory accounting. Your inventory is your most important asset and must be protected and cared for by all employees. Employees should have a clear understanding of all inventory-related processes, and those processes should be evaluated and updated as needed by appropriate management.



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