January: Your Most Important Audit
The post-holiday audit is the most important count you will do all year. Holiday traffic means higher shrinkage risk. Seasonal staff may have introduced errors. Returns are flooding in. And you need accurate numbers for year-end financials and tax preparation.
When to Count
Ideally, count during the first week of January after holiday returns have slowed down but before you start heavy restocking for the new year. Many retailers choose January 2nd or 3rd -- the store is quiet, and holiday chaos has settled.
The Post-Holiday Audit Checklist
Before Counting
- Process all pending returns and exchanges
- Receive and shelve any outstanding shipments
- Clear the back room of misplaced or unsorted items
- Remove any damaged items and document them separately
- Update any price changes or markdowns in Clover
During the Count
- Use blind counts for this audit -- you need unbiased numbers after the high-risk holiday period
- Count every location: sales floor, back room, fitting rooms, returns area, under displays
- Flag any items you cannot identify or that are not in your system
- Note items that need to be written off (damaged, expired, unsellable)
After the Count
- Reconcile against pre-holiday baseline if you counted in October/November
- Calculate your holiday shrinkage rate specifically
- Identify categories with the highest discrepancies
- Update all Clover quantities to match reality
- Document everything for your accountant
What to Do with the Data
Calculate Holiday Shrinkage
Compare your post-holiday count to your pre-holiday baseline (adjusted for known purchases and sales). The difference is your holiday shrinkage. If it is significantly higher than your normal rate, investigate why.
Identify Dead Stock
Any holiday-specific merchandise that did not sell is now dead stock. Mark it down aggressively and move it out. Dead stock ties up cash and takes up shelf space that could hold better-performing items.
Plan Your Q1 Buying
With accurate post-holiday counts, you can make smart purchasing decisions for Q1. You know exactly what you have, what sold well, and what did not. Use this data.
A thorough post-holiday audit closes out the year cleanly and opens the new year with accurate data. It is the reset button your inventory system needs.