6 good reasons to hire a professional inventory service and 3 good reasons to be precautious Part 1

Image from Francesco Marino and FreeDigitalPhotos

Professional inventory providers exist for good reasons. In the US alone, there are more than 1,500 inventory companies that engage in inventory services with varying degree in size and operation. Most of them operate to provide inventory solutions for companies in areas like retail, automotive, industrial, fixed asset, supply chain, healthcare, and even medical. Some of them even provide home inventory services. I'd like to address this article to retail owners and store managers in general.

6 Good Reason to hire them
Here are some reasons why companies and retail stores hire their services:

1. You don’t have the proper equipment and the right manpower. Retailers hire their own inventory managers to perform functions such as slotting, shrinkage control, training technical skills, etc. Most of their inventory equipment like handheld scanners, back end and computer systems are meant only to perform a limited function of inventory such as in-store audits, spot check mechanisms, analyzing data, forecasting, and purchasing. But they lack specialized equipment exclusively to perform a store-wide inventories. It is also costly to maintain inventory employees to perform the task. That is why retailers hire the services of an inventory provider to perform all aspect of physical count in their behalf.
2. For accounting purposes. Accounting department heads are responsible for keeping taxes, a checked and balanced financial matters of a business. They have specific knowledge of up-to-date taxation laws and can help verify retailers' conformity to stave off any possible taxation troubles and issues. To accomplish such tasks, they prefer external over an in-house inventory to perform physical counts of a company's assets. Which lead us to the third reason:
3. A Physical Inventory is required by law. IRS Publication 334 explains the requirements and how it should be done. For a complete information, visit the IRS Publication 334 page website and another here in PDF format. When the time you will be audited, an impartial and acceptable proof of physical inventory of your merchandise is required. This is not to say that in-house is less reliable than a third party inventory. But if you are expecting an independent or impartial audits for merchandise value of your retail store, or any of your asset, then hiring a professional inventory service would be an excellent choice. 
4. Convenience. For retailers who do not have the system, manpower, and equipment to perform an unbiased physical count of merchandise, an experience professional service is a convenient and a better alternative. There is no need for extensive planning, such as how much time shall be spent, where can you get the people. No need to close your store since you don't have to use your employees to perform the count . Not to mention paying them time and a half should you decide to utilized them for your physical counts after store hours.You can still use your employees and perform inventories AFTER office hours. It can save your time for your accountant, bank, the state and federal internal revenue services and even your insurance company. Professional counters can perform the job in much less hours saving you time, resources, and energy.
5. Experience. People who do counting as a living know what it takes to get things done, in the right way. Training people with the procedures and the technical side of inventories can be an expensive undertaking. Professional inventory services have done thousands of inventory instances. They know know and understand the importance of adhering to inventory procedures and best practices. 
6. Where an audited data is demanded on certain situations. Financial institutions such as Banks, insurance companies, lending companies, and other institutions guarantee, or insure property prefers on third party financial data gathered and consolidated using a widely-accepted procedures. It is also needed when there is a buyout or take over of owenership by another retailer or corporation where an actual value of the retail shall be required when determining the actual or presumed value of merchandise in a given location.

Those are the good side. But what about the bad side? In my next post, I will identify 4 precautions you should know when hiring a professional inventory service and see if hiring them is worth the try.

Happy Counting!

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