How To Audit Your Jewelry Inventory Without Disrupting Sales

To keep your jewelry store running smoothly, you need accurate numbers.

When you have a system in place to track these numbers — including inventory counts and sales data — you can notice trends in customer behavior and plan future inventory purchases for maximum sales.

Digital systems make it easy to monitor inventory, but doing physical audits from time to time is still necessary if you want to catch discrepancies and minimize loss. This is especially true at a jewelry store where each item carries a high price tag.

While these inventory checks are valuable, it can sometimes feel like they’re interfering with the rest of your store’s operations. In this blog, we’ll discuss seven proven strategies to conduct effective inventory audits with minimal disruption to your business.

What Is an Inventory Audit?

Conducting a physical inventory audit is simply counting out the quantity you have of each item you sell and recording it. If you use a point of sale (POS) system, you likely have access to inventory numbers through digital devices.

When you conduct your physical audit, cross-reference your count of an item with the number in the computer. If the digital quantity is off, adjust it so it represents the true number you have on hand.

Why Inventory Audits Are Necessary

Even with careful management, sometimes mistakes are made and numbers need adjusting. Luckily, modern digital platforms simplify the process of tracking inventory counts. These are a few reasons checking stock quantities is so important.

Minimize Theft

You’re careful with your inventory, and perhaps you use security equipment to protect it. Regardless, jewelry stores can be prime targets for theft, so as a business owner, you have to stay vigilant.

Recurring inventory audits help you identify missing pieces more quickly so you can then determine the cause. Pieces might be missing due to:

• An input error
• Loss
• Theft

Being aware of misplaced items and understanding the causes helps you set up systems to prevent it in the future.

Catch Operational Errors

Sometimes, when a number is off, nothing dishonest has happened. Perhaps an inventory amount was input incorrectly from the beginning, or a returned item or item needing repairs was logged incorrectly. Occasional audits help you identify these errors so everything is in its place.

Ensure Insurance Compliance

Cross-referencing your inventory counts isn’t just for personal use. Some insurance companies require you to submit periodic inventory reports for coverage purposes. This information is also helpful for accounting purposes and loan applications.

How To Audit Your Jewelry Inventory Without Disrupting Sales

Follow these strategies to run inventory audits without derailing your regular operations.

1. Plan Ahead

Start by making a plan. You might choose to audit your inventory every week or every month. Plan these checks for times when customer traffic tends to be lower, like earlier in the week or in the first hour after opening the store.

You can also determine how much of your inventory to count at once — rather than the entire jewelry store, you can check one section at a time to space it out.

2. Audit in Phases

Auditing your inventory in phases is less of a strain on you and your staff’s time. You can assign an employee to look over a specific section and put any updates in the computer, then have them return to their regular duties.

For example, you might have an employee audit your section of diamond jewelry one day, and then inspect your section of colored-stone jewelry tomorrow. This is an easier lift and only affects part of the jewelry store at a time.

Related Read: How To Organize Jewelry Inventory: 7 Effective Tips

3. Set Priorities

While audits are helpful, they aren’t the first priority — customers are. If you’re in the middle of the audit and you see an unexpected surge of shoppers, it’s best to pause the audit and help them, especially if a customer wants to browse the items you’re counting.

Discuss with your employees what to do if a situation like this arises. You may set a policy that, if a customer wants to take a look at an item, the audit should be paused while the customer is helped.

Related Read: Enhancing Customer Service: 7 Tips for Jewelry Stores

4. Assign Clear Roles

You can avoid shutting down your jewelry store for an audit by assigning only certain employees to it while others handle regular duties. If you have several employees scheduled, assign one to count inventory and another to assist customers and ring up their purchases. This prevents the inventory check from becoming everyone’s job and impeding sales.

5. Use Barcodes To Speed Up Audits

Using barcode labels to identify your products reduces manual entry for both sales and inventory audits. When it’s time to count items, you scan a label and the computer brings up the product. With the data at your fingertips, you can then make adjustments to the total as needed.

Without the ease of barcodes, an employee may select the wrong product and update it with an incorrect total. This mistake is especially likely for two distinct but similar-looking products, like two cuts of diamond rings. This small error could cause you to place an order too early, leading to both overstock and stockouts.

For the best results, use a POS system that’s compatible with barcodes so the entire system works together without friction.

6. Treat Repairs as a Separate Category

When regular sales inventory starts to mix with jewelry being repaired, numbers can get confusing fast. It’s better to treat repairs as its own separate category, but remember to track what jewelry you have on hand for repairs so it isn’t misplaced.

For this task, you can use digital work orders, which are a feature of some POS systems. Record details about the item, including the style, material, the owner, and a photo of the item so you always know what’s on hand and what repairs need to be done.

7. Track Patterns and Iterate

Occasional inventory audits serve a greater purpose than simply finding discrepancies. Paying attention to the results over time allows you to identify which products tend to remain accurate and which ones tend to have errors and mistakes.

Then, you can pinpoint where in the inventory process mistakes usually occur. Is it receiving, product returns, or repairs? Or maybe you find trends based on products. Perhaps smaller items like gold rings see more inventory issues because they’re easier to lose track of than larger pieces like chain bracelets.

Once you’ve identified what the problem is, you can tighten up your procedures to prevent errors in the future.

Related Read: Jewelry Store Cash Flow Forecasting: Beyond Seasonal Patterns

Simplify Jewelry Inventory Audits With Jewel360

Doing regular inventory counts, assisted with digital tools, helps you minimize errors and create an informed purchasing strategy.

But when it’s time to audit your inventory numbers, the rest of your jewelry store doesn’t need to come to a grinding halt. Planning ahead, auditing in phases, and splitting up duties allows you to run an inventory check in the background while making sales and conducting business as usual. With modern digital tools, you can do small consistent checks rather than one big audit per year.

Digital tools make inventory audits faster and easier to carry out. Jewel360 is a POS solution built just for jewelry stores. With barcode compatibility and easy inventory count adjustments, you can speed up the process without inhibiting sales. And because the system is cloud-based, you can adjust inventory on the go with a smartphone or tablet.

Jewel360 also offers general retail features like payment processing, e-commerce, and marketing, and jewel-specific features like custom work orders and access to online jewelry suppliers.

To see what Jewel360 can do for your store, schedule a demo today!