Cycle Counts vs. Full Physical Inventory: Which Approach is Right for Your Rental Business?
Faith Kubicki
Keeping an accurate record of your inventory is crucial for any business – but in the rental world, it can be especially complex. You don’t just have retail items to track; you also have to manage parts for your service department, as well as your actual rental assets. It may seem hard to lose track of a 60,000-pound piece of heavy equipment, but talk to any experienced operator; you’d be surprised how often assets end up delivered back to the wrong branch or back in the rental yard without anyone realizing. While Connected Assets can help you keep a close eye on your equipment, it’s still important to double check quantities from time to time, just to prevent any small discrepancies from becoming larger problems.
Generally speaking, there are two options for counting your inventory.
- Cycle counts work through individual product codes one at a time. On Day One, you count your quantities on hand for Product A and B; on Day Two, you count Product C; on Day Three, you count Product D and E, and so on until you’ve counted all of your items. Once you reach the end, you start back at the beginning. (Here’s a quick primer for calculating your cycles.)
- A full physical count has you work through all of your items at once. This process can take several days; you may have to shut down your location as you prepare for and complete the count. Of course, a little prep work goes a long way; here are six steps you can take for a faster, more efficient physical inventory.
A full physical inventory requires more than just counting your items and updating the quantities in your ERP. Before you get started, you’ll need to account for equipment that’s been recently purchased, recently sold, is offsite for repair, is currently out on rent, or is associated with an open transfer. You’ll also need to close any open transfers and – if possible – instruct the sending location to receive the equipment back to their location.
Cycle counts make the process more manageable by moving through smaller groups of inventory while you continue your normal day-to-day operations. This helps you avoid shutting down a branch (and missing out on potential revenue) to work through a full physical inventory. Because you’re consistently monitoring your quantities, it also lets you find and fix errors in your rental inventory software before they turn into major problems.
Of course, cycle counts do require you to consistently find the time to count every day or every week. Your team will need to commit to keeping up with the routine. If you find that you’re not quite there in terms of consistency, a full stock count inventory can help you knock the entire process out in a single dedicated block. (Check out these stock count procedures that can help you streamline and standardize those efforts.)
Ultimately, there’s no right or wrong approach. Whichever process you can maintain with minimal disruption to your day-to-day operations is the route you should take. You can even combine both for a more comprehensive approach to rental inventory tracking.
Discover a Better Approach to Managing Your Rental Inventory
Whether you choose cycle counts, full inventories, or a combination of both, the InTempo Enterprise rental ERP lets you accurately manage your parts, merchandise, and equipment inventory. Configure your categories, classes, cycle durations, and other settings, then follow our comprehensive step-by-step guide for counting and updating your inventory levels.
Ready to discover a more thorough, scalable approach to rental inventory tracking? Contact us today to learn more.
