Inventory Counts & Reordering: the full procedure

Run regular cycle counts, reconcile shrink, and reorder against par and reorder points before stock runs out or piles up.

• Applies to: Inventory lead / store manager.
• Frequency: Weekly cycle count; reorder review per cycle.
• Scope: Covers counting on-hand stock, reconciling discrepancies, triggering purchase orders, and clearing slow or dead stock.

What you need

• POS / inventory system
• Cycle count sheet
• Reorder point report
• PO template
• ABC / aging report

The procedure, step by step

1. Schedule cycle counts — Count a rotating portion of SKUs each week so the store keeps operating and errors surface faster than an annual count.
2. Prioritize by value — Use ABC analysis to count high-value, high-turnover (A) items most often and track them closest.
3. Reconcile shrink — Compare counted on-hand to system on-hand, investigate gaps, and record whether the cause is theft, miscount, or damage.
4. Set par & reorder points — Calculate each reorder point as average demand × average lead time plus safety stock, not gut feel.
5. Trigger purchase orders — Create POs for any SKU at or below its reorder point, ordering up to par.
6. Flag slow & dead stock — Run an aging report and list items not selling so they can be marked down, promoted, or transferred before write-off.
7. Update the system — Post adjusted counts so on-hand figures, reorder triggers, and reporting stay accurate.
8. Document & hand off — Log the count results and pending POs for the next shift and the buyer.

Quality check before you finish

• Cycle count completed for the scheduled SKU group.
• A-class items counted on the tighter rotation.
• All count variances investigated, not just adjusted away.
• Reorder points based on demand & lead time, not guesswork.
• POs created for every SKU at/below reorder point.
• Aging report reviewed and slow/dead stock flagged.
• System on-hand updated to match physical count.

This is a free, source-anchored standard operating procedure (SOP) you can print and hand to staff. It documents the work sequence for a Small Retail Store business — not safety or regulatory rulings, which defer to the cited authorities, the applicable code, and your own health-and-safety plan. Open the tool above to print it, toggle ink-saver, or (with a free ToolFluency Business account) edit it to match your own workflow.

Sources

• Lightspeed — Inventory Reconciliation (lightspeedhq.com)
• ThriveMetrics — Min/Max Reorder Levels (thrivemetrics.com)
• Impact Analytics — Retail Inventory Management (impactanalytics.ai)