We ll show you how to set a solid foundation to create systems for monitoring what s selling and what s out by:

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1 Inventory 101

2 Inventory Management Managing your inventory is an important part of the success of your business. An emphasis should be placed on creating and maintaining systems so that costs and revenue can be properly calculated. Simply put, what you put in, is what you get out. Systems We ll show you how to set a solid foundation to create systems for monitoring what s selling and what s out by: Counts Adjustments Orders Reports Best Practices Since inventory is one of your biggest assets it s crucial to pay attention to all areas of management. Your team should focus not only on proper ordering procedures, but also making sure they are selling the correct items on each ticket. A good system shortens the road to the goal. Orison Swett Marden

3 Levels Using your tools and this handy formula, we ll show you how you can determine and set inventory levels on each item. Doing this process and adjusting for seasons, promotions and holidays will allow you to maintain the perfect amount of inventory, maximizing profits. WEEKLY FORMULA Movement Average Shelf Min/Max Setting = 12 You sold an average of 2 (always round up) for the week plus the 10 you need on your shelf means that you ll set your Min/ Max to12/ = 12/12 TIP If you notice an item highlighted in red on a ticket, it s a visual cue that you are selling a product that has fallen below its minimum level. To review the setting go to the Inventory default settings in Blueprints.

4 Average Product Movement Weekly formula example (7-day) for Control Paste Moved 1.13 (2) + Shelf (10) = MIN 12 /MAX 12 Bi-Weekly formula example (14-day) for Control Paste Moved 2.26 (3) + Shelf (10 ) = MIN 13 /MAX 13 TIP Your order frequency will be the determining factor on your average movement formula. If you place an order each week, you ll run your report using the weekly (7-day) option. If you order every other week or twice a month, you ll use the bi-weekly (14-day) formula.

5 Counts Performing regular inventory counts will ensure that your inventory is always up-to-date. Counting will enable you to see if mistakes are occurring during the receiving process, alert you to items that are out of stock and bring to mind any shrinkage you may be experiencing. Click here for the steps. An Inventory Count takes a picture of your inventory at a moment in time. The more often you count, the more accurate your inventory will be. Pre-Count Checklist Close all open tickets Close all old open shifts and days Close all open adjustments Close all open receiving orders Void any old open inventory counts It is best to perform your counts when you are closed or on a slower day of the week so that you can focus on counting while transactions are not taking place.

6 Cycle counts are the best way to count your inventory. Cycles group your stock so that there are not as many items to count at one time. This saves tons of time and keeps your on-hand quantities accurate. See how to set up your cycles. Have you ever run out of color and had the staff screaming mad (talking to you 6N)? You can eliminate the chance of this happening by creating a count that includes your supplies and professional items. Due to the important role these products play in your daily business operations, we recommend that your Supplies and Professional count be performed each week. TIP If it s open don t count it!

7 Adding Items To set your system up for success, take your time when adding items making sure you complete all of the fields. Play close attention to vendor info, category, costs and (of course) set your levels. If this is a new item to your business you may have to anticipate your initial levels based on shelf space and customer interest in the item. It is a best practice to monitor and adjust levels occasionally. Click here for the steps Once you ve mastered your system, the next step will be to set seasonal levels for a specified date range.

8 Price Book The Price Book gives you access to your inventory by category or by vendor, saving you tons of time updating your quantities and even your mins and maxes. Price Book Guide. TIP You can enable the spreadsheet version of the Price Book by going to the default settings in Blueprints - Inventory.

9 Adjustments Creating an inventory adjustment is the way to alter your on-hand inventory quantities without making a sale. Keeping track of adjustments is important because you ll use the information to calculate the percentage of product cost for each department as a percentage of total sales. You will also use the data to track your costs associated with retail testers, damaged items and donations. Adjustments guide Keep Track! It s a best practice to keep track of your professional product usage. Collecting color tabs and developer lids for an adjustment should be a part of your nightly closing procedure. If you see zeros in the cost fields, it means that the item has not been properly received into your inventory. TIP To correct this: adjust the product quantity to zero and then receive the product in through a Receiving Order. Adjustments should be created as soon as the product is opened, damaged or received. Make sure you process your adjustments every day.

10 Auto-Order Once you have your minimum and maximum levels set, the system can automatically create your purchase orders. See the steps on orders. Auto-creating purchase orders is a huge time saver; you ll keep your shelves stocked without over-ordering. Automatic Ordering Sample Minimum Level = 28 Maximum Level = 28 On hand quantity = 10 System will order = 18 TIP If you notice a item highlighted in red on an order, it s a visual cue that the product has fallen below a certain margin of cost. To review the setting go to the Inventory default settings in Blueprints.

11 Receiving Orders Properly receiving your inventory into your system is extremely important. This part of the process not only sets your on-hand quantities but also sets product costs which greatly affects your financial reporting. Get the steps on ROs. TIP Click the Check All button on your large orders to speed up the receiving process. You can always go back to individual items and make corrections on any discrepancies to the actual quantity received.

12 Returns Returns and exchanges affect your inventory levels so it s important to pay attention to where you are returning the item on the ticket. See how to properly return an item. Return to Inventory Stock if item has not been used and can be resold For Internal Use if item can be used as a tester Return to Vendor if client has had an allergic reaction to the product or the product is defective You can also create your own product return reasons, and require selection upon a product return on a ticket. Set up your Return Reasons in Blueprints/ Inventory/Product, and set the Ticket Default Setting, "Return Item - Require a reason for product returns?" to Yes. Spoilage (Trash Can) if the item cannot be used in any area of the salon Save paper and clutter in your client s pocket. Only print receipts that have product sales (thank you return policy)! TIP Go to Blueprints Ticket Default Settings and answer these questions: Print ticket after processing NO Auto Print Ticket Only if products were sold YES

13 Spot checks Always keep an eye on your inventory levels by performing random spot checks on various items. Utilize the inventory tab in the File Drawer to view on-hand quantities and then do a quick physical count on the item to make sure you have a match. If spot checks are constantly off you will need to pay greater attention to regular inventory counts and adjustments. Adjust Make sure to create an inventory adjustment so that your on-hand quantity matches the quantity on file. Best Practice This is one of our favorite best practices because anyone can do it! It s a great task for your front desk team to do during a slow time of the day or while they are restocking and dusting those shelves! I think anything is possible if you have the mindset and the will and desire to do it and put the time in. Roger Clemens

14 Reports What When Why Average Product Movement Monthly Provides a weekly average of items sold so you can set your inventory levels based on actual sales. Product Ranking by Quantity Monthly Creates a focus for your top 25 products so that you can keep higher inventory quantities on them. Hot & Cold Monthly Used to identify your top selling and slow moving items by sales revenue. Product Sales by Item Weekly or Monthly Measures the sell through of items per category. Out of Stock Daily To keep staff informed of out of stock products. Great for make up artists and retail team. Current Status of Inventory Adjustment Summary Monthly Monthly Takes a snapshot of your current inventory stock. Use this for year-end inventory. Summarizes the adjustments made so that you can determine your professional product and tester costs. Average Item Adjustment Monthly Helps you determine adjustments so that you can set your inventory levels.

15 To-do s Close all open tickets Close all open shifts and days Close all open inventory adjustments Close all open receiving orders Year-End Checklist Here are some helpful tips and best practices to close out 2017 and bring in 2018 with a bang! Print a list of all of your in process purchase orders Void any old open inventory counts Perform an inventory count Reports Management: Daily Summary Report 01/01/17-12/31/17 Accounting and Sales Summary select monthly for a year Tax Collections Summary 01/01/17-12/31/17 Inventory: Current Status of Inventory by Category (takes a snapshot of your current inventory) Run this before and then right after you perform your year-end physical inventory count Run this report at close on your last day of business in 2017 Adjustment Summary 01/01/17-12/31/17 Ticket: Tip Summary 01/01/17-12/31/17 Staff: Staff Commission Summary 01/01/17-12/31/17 Productivity: Time Payroll Summary 01/01/17-12/31/17 Best Practices If you have extra gift sets - don t discount them! You have another holiday right around the corner. Keep as much of the packaging as you can and refresh them for Valentine s Day. If you are breaking down gift sets and adding the individual items back into your open stock; first, create a new adjustment reason called breakdown of gift sets. Then, create an adjustment of the gift set OUT and add each of the individual items IN using the new reason. Remember how busy you ve been the past few weeks imagine if you were that busy all of the time! Using our free online booking feature will help book you solid 24/7. Make sure your staff has access to the SalonBiz Stylist App so that they can book appointments on the go - wherever they are, put the power in their hands (literally) to promote themselves and fill their book via their mobile phone! salonbizsoftware.com

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