‍Inventory Management & Auditing: Best Practices for Dispensaries

Inventory management and auditing are crucial for running any dispensary, bridging the physical and digital realms. Your physical inventory must be reconciled and documented in your POS system to maintain accurate product counts and ensure state compliance. Knowing your inventory’s status and quantity directly impacts sales and future purchasing, making it vital to stay current with auditing best practices.

In this guide, we’ll explore the importance of inventory management, define auditing, share best practices, and show you how the right POS system can simplify your auditing process. . 

‍The Importance of Inventory Management

Inventory management, the process of controlling and maintaining both the physical inventory in-store and the digital counts in your POS system, is a critical yet often challenging task. To comply with state traceability systems, dispensaries must implement thorough and robust inventory management practices. Effective inventory management not only ensures compliance but also helps track theft and shrinkage and allows managers to accurately predict future product needs for wholesale purchases. Without proper inventory management, purchasing and inventory can become disorganized, leading to time-consuming corrections down the line. 

Strong inventory management practices are the cornerstone of any successful dispensary, and the best way to maintain accurate counts and keep inventory up to date is through regular auditing. 

What is Auditing?

Auditing involves counting your current inventory and reconciling those counts in the system, usually before or after hours to avoid sales impacting the data. This is typically done by physically counting each product to ensure data accuracy. Frequent auditing helps maintain correct inventory counts and catch discrepancies early. 

Discrepancies can arise for many reasons:

• Ghost weight: When a nug falls on the floor and is discarded improperly, causing a package to be missing weight
• Busy days: On high-traffic days like 4/20, staff might misplace items or fail to return products to their correct locations
• Double scans: Accidentally scanning a product twice results in one count being over and another being under, often called an “over under”
• Misplacement: Budtenders might demonstrate different versions of a product to customers and not return items to their correct spots
• Theft: In markets where products can be displayed, items may be stolen.

Following auditing best practices helps catch these mistakes early. Without regular audits, small discrepancies can lead to significant inventory count issues. While counting and auditing can be quick, troubleshooting discrepancies can take hours of investigation, making frequent auditing essential to avoid this time-consuming task.

What Are Auditing Best Practices?

To maintain auditing best practices, we recommend:

• Writing SOPs (Standard operating procedures) for staff to follow consistently
• Counting inventory frequently—one category each day ensures the whole store is counted weekly
• Dividing the work among multiple staff members for efficiency 
• Using top-of-the-line software for smoother audits

How Can You Make the Auditing Process Easier?

We’ve emphasized the importance of inventory management. Auditing is crucial to proper inventory management. But how can you optimize this process to make it more efficient? Traditional cannabis retail auditing involved long hours, team pizza nights, and manually writing inventory counts in the margins of paper printouts. With the right POS system, it can be as simple as scanning barcodes directly into the system, saving time and energy so your team can focus on customers.

Look for systems that offer real-time audit statuses, showing whether a product needs auditing, is in process, or when it was last completed. Real-time updates make it easy to run reports and schedule the next audit. Barcode scanning speeds up the process, while clear error messages help catch and correct discrepancies immediately. Dutchie POS also includes a manager approval flow, requiring managers to confirm counts before updating the POS and state compliance systems, ensuring accuracy.

Dutchie POS does all of this and more with our simplified auditing features. Our team of industry veterans built our auditing off of years of experience working in dispensaries, and have revolutionized what in-store auditing looks like to make work flows more efficient.

Inventory Management is the Heart of a Happy Dispensary

Mistakes and discrepancies happen. Is your store ready to handle them? Maintaining accurate inventory can be a breeze with the right POS system and processes. Regular audits ensure compliance, support precise future purchasing, and simplify reporting, making life easier for your entire team. An intuitive POS system like Dutchie streamlines auditing, encouraging quick and easy inventory counts.

Want to learn more about how Dutchie can enhance your inventory management and auditing?
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