An accurate inventory audit is a thing of beauty. It provides retailers with a detailed look at what is going on inside the store. Furthermore, an accurate audit gives store managers the confidence they need to take action and resolve issues, reduce shrink and improve profits.

With so much at stake, it might be useful to review a blueprint of an accurate, efficient, and effective inventory audit. The process used at Quantum Services is known as the 7Cs. There is nothing magical about it and your audit program might contain similar aspects. 

1. Consistent Layout of the Store
   • Use a consistent numbering system as you segment the areas of the store, and always map the store in the same direction.
   • Gondola breakouts should be four-foot sections.
   • Storage and walk-in areas should be counted by department.
   • Checkouts should be broken out using "front" (what the customer can reach/see) and the department, and "back" (what the customer cannot reach/see) and the department. As a  rule of thumb, limit breakouts to less than $1,000
     
     
2. Contracting With the Store Manager
   • Always clarify expectations with the store manager: Discuss time frames, including when things are due from  the auditors and when things are due from the store manager to help with coordination and efficiency.
   •  Always complete a three- to five-minute pre-walk with the store manager prior to counting inventory to ensure that there are no surprises. Verify any potential problem areas, such as a backroom that is in disarray, or merchandise that is not priced. If sections of the store are not audit-ready, ask the store manager to fix the problems.
   • Check in every hour with the store manager to help keep the audit on track.
     
     
3. Crew-Flow Effectiveness
   • Discuss any expected deliveries and adjust the crew flow accordingly.
   • Count merchandise as you pass it — don't skip around the store.
   • Design your crew flow to eliminate dead time.
   • If you're the lead auditor, stop counting before the other auditor to ensure ample time for paperwork.
     
     
4. Counting the Store Accurately
   • Never compromise your accuracy  and integrity.
   • Only count what you can actually see and don't include any product that is not physically at the location.
   • Ask questions to give the store manager more confidence in the accuracy and thoroughness of your audit.
     
     
5. Comparing Figures
   • Review all section comparisons prior to sharing with the store manager. Recount any sections that have unusual or unexpected variances from the  last audit.
   • Review all sections with the store manager that have a variance of more than $200 and 15 percent.
   • Avoid recounting sections more than twice. Requests for numerous recounts indicate a lack of confidence by the store manger. Therefore it is important identify and address the real issues.
     
     
6. Closing the Audit Effectively
   • Don't calculate or share the audit results with the store manager until you are satisfied that the physical count is accurate.
   • Follow procedures to make sure the sales and purchases are accounted for correctly.
   • Review observations and recommendations for the next audit with the  store manager.
   • Audit day is always a stressful day for store managers — thank them for their time and efforts.
     
     
7. Calling for Help Demonstrates  Professionalism
   • Recognize problems early and get help right away. There are more options if you get others involved earlier.
   • Even auditors with years of experience will run into problems and situations they have never seen before.
   • When in doubt, call for help. With people's jobs on the line, an auditor needs to get it right.