Steeply upwards: This is the direction in which the sales of POCO are pointing. The company is continuing to expand and wants to keep administrative costs under control. Against this background, the retailer introduced sample stocktaking last year. After the furniture retailer had looked into permanent inventory, the auditing company pointed out the sample inventory procedure as an alternative to the time-consuming and cost-intensive full count.
Full inventory brings pseudo security
They were quickly convinced that sample stocktaking is not only much faster, but also more reliable and accurate than the classic full inventory. Of course, when 20,000 different items have to be counted by human hands at a single location, errors are bound to occur. The result is inaccurate inventories or planning bases. In other words, the full inventory gives the markets a false sense of security.
For this reason, Section 241 of the German Commercial Code (HGB) allows so-called random sample inventories to be carried out for warehouses and retail stores with a minimum of around 1,000 items and computer-aided inventory management. Here, the furniture store relies on the "Moeve" merchandise management system, which was specially developed for the furniture trade, and the supplementary inventory management solution REMIRA LOGOMATE. On this basis, the company has reliable inventory data that is not shaken by unavoidable shoplifting and other shrinkage.
Decision for STATCONTROL
The inventory sampling method draws its advantage from the phenomenon that about 20 percent of all stock items represent 60 to 75 percent of the stock value. Accordingly, when drawing up the inventory, the stock may also be determined on the basis of random samples using recognized mathematical-statistical methods. The prerequisite is that the methods used comply with the principles of proper accounting (GoB) and that the sample inventory result is within the limits permitted in Germany. In the search for the right supplier, the IT, Organization, Financial Accounting and Auditing departments started the selection process in summer 2013. The contract was awarded to REMIRA with its STATCONTROL solution. The software enables sample stocktaking with all four permissible extrapolation methods. In addition to the program, however, the personal impression also played a major role in the decision.
„The presentation of REMIRA STATCONTROL was very convincing and credible“
recalls one of the decision-makers. He particularly liked "the high level of competence of REMIRA's employees, who focus exclusively on the subject of inventory". Last but not least, the price was also right.
Amortization in six months
The furniture store purchased ten software licenses and signed a maintenance contract. "The subsequent implementation with an interface to the Moeve merchandise management system was very easy," says the company. In addition, the company drew up precise instructions for carrying out sample stocktaking and had these approved by the auditor. With these tools, the furniture retailer initially planned to convert 30 percent of its furniture stores and regional warehouses to sample stocktaking in 2014.
However, the first use of the new solution was in 2013 at a location in southern Germany. Here, the software determined around 400 items from the total inventory, which were counted by 15 employees in just two hours. The counting results there were within the legally prescribed threshold values, and the time saved for the auditing department and the employees on site was enormous. For the auditing department, this meant a reduction in effort from seven to one man-day when accompanying a store audit. The savings in the actual counting process were even greater. The full inventory took 40 to 45 employees two evenings to complete. In addition, a lot of time was spent on preparation, which is significantly reduced with the sampling procedure. Another advantage is that each store manager can now decide for himself whether to count within or outside store opening hours.
No wonder that the first positive experiences led to a change of plan. Instead of 30, 45 percent of the locations were already converted to the sampling method in the first year. In 2015, the remaining locations will then also benefit from REMIRA STATCONTROL.