You count your inventory. You check your system. The numbers don’t match.
Sound familiar?
You’re not alone. This is one of the biggest headaches for distribution and wholesale businesses. And it causes real problems. You promise products you don’t have. You miss sales because you think you’re out of stock. Your accounting is off.
Let’s fix it.
Why Inventory Gets Off Track
1. Things Come In But Don’t Get Entered
A shipment arrives. Someone puts it on the shelf. But nobody enters it in the system.
Now your system says you have 50 units. You actually have 150. You order more because the system says you’re low. Now you have too much.
This happens a lot when receiving is busy or when the person who enters data is different from the person who receives goods.
2. Things Go Out Without Being Recorded
A customer picks up an order. The warehouse guys load it. But the paperwork doesn’t get done until later. Or never.
Your system says you have 100 units. You actually have 50. You sell items you don’t have.
3. Damaged or Lost Items Sit in the System
A box falls. Product gets damaged. It goes in the corner.
But nobody removes it from inventory. Your system says you have it. You don’t.
Same with theft. Same with items that just vanish. If you don’t record it, your numbers are wrong.
4. Data Entry Mistakes
Someone types 15 instead of 50. Or enters the wrong product code. Or forgets the decimal point.
These small mistakes are everywhere. And they add up.
5. Timing Problems
Your salesperson sells 20 units at 10 AM. The data doesn’t get entered until 3 PM. At 11 AM, someone checks inventory and sells those same 20 units to another customer.
Now you’ve sold 40 units you don’t have.
6. Returns That Don’t Get Processed
Customer returns a product. It goes back on the shelf. But nobody updates the system.
Or worse: the return gets entered twice. Now your numbers are too high.
The Real Cost of Bad Inventory Data
This isn’t just annoying. It costs you money.
Lost sales. You think you’re out of stock so you tell customers no. But the product is sitting right there.
Overstock. You order more because the system says you’re low. Now you have dead stock tying up cash.
Unhappy customers. You promise what you can’t deliver. Customers stop trusting you.
Month-end headaches. Your accountant asks why inventory value doesn’t match. You spend days figuring it out.
Poor decisions. You can’t plan purchases or manage cash if you don’t know what you have.
How to Fix It
Step 1: Count What You Have
Start with a clean slate. Do a full count. Update your system to match reality.
Yes, this is painful. But you need a baseline.
Step 2: Fix Your Receiving Process
Every item that comes in must be entered right away. Not later. Not end of day. Right away.
Use a checklist:
- Check shipment against purchase order
- Count items
- Note any damage
- Enter in system immediately
- Put items in the right location
Step 3: Fix Your Shipping Process
Nothing leaves without being recorded first. Not even small orders. Not even pickups.
The rule is simple: if it’s not in the system, it doesn’t leave the building.
Step 4: Handle Adjustments Properly
Set up a process for:
- Damaged goods
- Returns
- Missing items
- Corrections
Every adjustment needs a reason. Track them so you can spot patterns.
Step 5: Count Regularly (But Smarter)
Full inventory counts are expensive. They shut down your warehouse.
Try cycle counting instead. Count a few items every day. Over time, you count everything. But you never stop working.
Focus on high-value items and fast movers. Count them more often.
Step 6: Use Technology
Here’s the truth: doing all this by hand is hard. People make mistakes. Things get busy.
Good inventory software helps because:
- Real-time updates - Sales update inventory immediately
- Barcode scanning - Less typing means fewer mistakes
- Automatic alerts - Know when numbers look wrong
- Audit trails - See who changed what and when
- Integration - Sales, receiving, and accounting all use the same data
You don’t need fancy robots. You need a system that keeps everything connected.
Warning Signs Your Process Needs Work
Watch for these:
- You’re always finding “surprise” stock
- Customers complain about orders you can’t fill
- Month-end inventory adjustments keep growing
- Your team doesn’t trust the numbers
- You’re ordering based on gut feeling, not data
If you see these, take action now. The problem only gets worse.
Start Small
You don’t have to fix everything at once.
Pick your biggest problem. Maybe it’s receiving. Maybe it’s returns. Focus there first.
Get that working. Then move to the next problem.
Progress beats perfection.
The Bottom Line
Inventory mismatches happen for simple reasons. Things come in and out without being tracked. Mistakes happen. Timing is off.
The fix is also simple. Good processes. Consistent execution. And software that keeps everything connected.
Your inventory count and your system should match. It’s possible. Many businesses do it every day.
You can too.
Tired of inventory headaches? See how Magnofy helps distribution businesses keep accurate inventory across all their warehouses.
