Inventory accuracy
Inventory accuracy is how closely the stock recorded in your system matches what is physically in the warehouse. It is usually measured by counting locations and dividing the number that match the record, within an agreed tolerance, by the number counted, expressed as a percentage.
How to measure inventory accuracy
The most common measure is location accuracy: count a set of locations and compare each one to the system. If you count 200 locations and 188 match exactly, location accuracy is 188 ÷ 200 = 94%. Some operations allow a tolerance for low-value items, such as a match within one unit, and state that tolerance with the result.
Unit accuracy looks at the size of the errors instead. Add up the absolute variance of every counted line and divide by the system quantity counted. Always use absolute values: a bin that is 5 over and another that is 5 under net to zero, but they are two errors, and a net figure would hide both.
Why inventory accuracy matters
Every downstream decision assumes the record is true. Pickers are sent to empty bins, orders are promised against stock that isn't there, reorder points trigger too late or too early, and finance values stock that doesn't exist. Low accuracy also makes people stop trusting the system, which leads to side spreadsheets and even more errors.
Common causes of inventory inaccuracy
Most errors come from a movement that happened on the floor but not in the system, or the reverse.
- Receiving errors, such as cases received as units or a short delivery received as complete.
- Putaway to a different bin than recorded, often without a location scan.
- Picking the wrong item or the wrong quantity without a verifying scan.
- Damage, samples and write-offs that nobody recorded.
- Transactions entered hours after the physical move.
How to improve inventory accuracy
Scan every movement at the moment it happens, at both the item and the location. Run regular cycle counting with blind counts and recounts. Record every change in an inventory ledger with a reason, so variances can be traced back to the step that caused them. Then fix the process at that step, not just the number.
How NextStock tracks inventory accuracy
NextStock records every quantity change as a ledger movement with a reason, scans locations and items on the floor, and runs blind cycle counts with recounts and variance approval. Count accuracy is one of the KPI reports in reports and alerts, and can be delivered on a schedule.
Part of the NextStock warehouse glossary. Browse the full glossary