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How to prepare a month end report
How to prepare a month end report

Discover the main factors to take into account when you’re calculating inventory balances for each month

Max avatar
Written by Max
Updated over a week ago

Are you still intimidated by the inventory count at the end of the month? Poster is here to help! We've put together this cheat sheet article that helps you prepare for your monthly inventory count. Let's go 🚀

😎 Get ready

Before you start calculating balances, check if all the necessary data is in the system. To do this:

  • Close all receipts so that every stock deduction after each sale appears in your inventory.
    💡 To close a receipt on the POS register, click Pay and select a payment method. After that, in the Reports → Receipts tab, the receipt status will change to Closed.

  • Check to see if all deliveries, stock deductions, movements of ingredients, and manufactures have been entered into the system. If something is missing, add it to the Poster admin panel before moving on.

👁 Run an inventory check

Start by choosing the type of inventory check.

  • If you want to take stock of every product in your business, you can run a full inventory check.

  • If you only need to check a small part of your inventory, you can run a partial inventory. For example, you can count all the ingredients in the Vegetables category or all the items in the Cold Drinks category.
    💡 If you haven't already put your ingredients into categories, we recommend doing so next month. This will make it much easier to run a partial inventory.

Pick the time for which you want to run an inventory check:

  • If you already ran an inventory check beforehand, and you want to input the results into the system, run a retrospective inventory check and choose the date and time when you performed this inventory check.

  • If you’re going to perform an inventory check now, run a current inventory check.

Run inventory checks to find out your expected balances and record your actual balances.

📋 To conveniently check inventory balances, print out an inventory sheet or fill out the inventory sheet in the app on your tablet or smartphone.

☝ If you have multiple storage locations, take inventory for each storage location separately.

🕵🏻‍♀️ Let’s take a closer look at the results of the inventory check

The result of your inventory check will be the difference between actual and expected balances, for both the quantity of products and for their cost.

  • Expected Balance is the amount of items and ingredients that should be in stock, taking into account all sales, ingredient movements and stock deductions registered with Poster.

  • Actual balance is the amount of items and ingredients seen and counted in stock at the time of your inventory check.

To find out why there are differences between expected and actual stock balances, review the movement of goods and ingredients in the selected inventory period.

For example, the expected balance is 20 liters of milk.

When counting stock in our fridge we found 9 unopened bottles of 2 liters each and an open bottle of 1.85 liters.

The actual balance in our storage location is: 9 × 2 + 1,85 = 19,85 l

The result of the inventory is calculated as follows: 19.85 - 20 = - 0.15 l

💡 Small differences are to be expected in inventory checks, because the most common reasons for discrepancies are human error. For example, if one of your chefs put parmesan in a pasta dish to make up for an order that arrived later, even though the recipe didn’t call for it🤌🏻

If your inventory check shows a significant surplus or deficit, then we’d recommend looking into it in more detail.

🔎 How to analyze the results of the inventory check

Analyze the result of the inventory check, and find the causes of discrepancies.

  1. Highlight the items for which there are large discrepancies.

  2. If the item in question is something that you resell and do not produce yourself, such as a bottle of water or a tub of ice cream, check your purchases from suppliers. If you don’t see any errors, there could be several reasons for shortages: theft, forgetting to deduct expired products, or a mistake your employees made when they sold a product.

  3. If it's the ingredients you're cooking with, you should check the preparations and dish recipes. If there are no errors in them, check how accurately the cooks adhere to the recipe. If everything else is in order, there might be some theft or unrecorded deductions.

📖 Here we've explained in detail what the causes of shortages can be, and how to find and fix them.

🤫 Fixing problems

If you’ve previously made a mistake when counting a product, you should zero them out when you take inventory. After that, the cost will not be averaged with the values of previous purchases from suppliers.

Then, to enter the actual balances of products and ingredients in storage locations, add new supplier purchases in the Inventory → Supplies tab. If the products in the shipment have already been paid for, do not select an invoice in the Payment field.

💪 If you want to start your record-keeping from scratch and not ignore previous data you’ve inputted into the system, write to us in chat, and our support team will help you out.

Regular inventory checks will help to detect discrepancies in time and optimize your work with your inventory. You can also check out our blog to read more about how to handle your inventory.

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