This Simple Mistake Is DESTROYING Your Inventory

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When managing inventory you should keep an eye out for this bad practice that could destroy your inventory forever. I get phone calls all the time complaining about how no matter what the distributor does, their inventory on hand values are always wrong. To the point that they'll do a cycle count and a week later their inventory is inaccurate.
After months of brainstorming, tests and research, I uncovered that the issue lies in how the distributor inputs cycle counts/adjustments into the accounting system. This process in particular had created a100k discrepancy in one of my distributor's balance sheet. In short, they had created a physical inventory count for the day in addition to multiple invoices, credits, and inventory transfers. These transactions were physically created in a sequence. When the distributor went to enter the inventory count into the accounting system, they entered it in the completely wrong sequence. For example:
EXPECTED SEQUENCE
Starting Inventory - 100 Bananas
Invoices - 10 Bananas Sold
Expected Bananas - 90
Inventory Count - 80 Bananas Counted In The Warehouse
Inventory Adjustment = -10
Ending Inventory Value = 80
Actual Sequence
Starting Inventory - 100 Bananas
Inventory Count - 80 Bananas Counted In The Warehouse
Inventory Adjustment = -20
Invoices - 10 Bananas Sold
Ending Inventory Value = 70
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[@cacique260]

Thank you!! Your videos really hits all the points and I have been using them in my new position as Warehouse Inventory Manager. Having the experience and your videos really help my company to minimize discrepancy in our sytem.

[@Laceupsolutions]

Appreciate you my brother :)

[@Shakarhaba]

An invoice should not be generated until the goods are actually picked, and the invoice should automatically create a decrease in the stock, it should not happen manually, that's just asking for errors.

[@austinevrenthandfamily2878]

I think he means already picked

[@austinevrenthandfamily2878]

But you don't make adjustments without reason or remarks.

[@muhammadtayyab8770]

Thanks Brother Your Video is more helping for me

[@michellegulbransen2228]

Great video 👍🏼

[@ezrhino100]

why would you give them both the invoice and adjustment? why not just the invoice?

[@austinevrenthandfamily2878]

I dpn't think you make adjustment without reasons or remarks in your report. So why?

[@ToddieScene]

An if you have 6 thousand individual parts with different invoices and quantities... This is still the best way is it?

[@carlirosebenito261]

THANK YOU!

[@Laceupsolutions]

You're most welcome :)

[@kylesi9797]

An idiot would never adjust on the books with no follow through. Of physical count😢