How to Catch Inventory Errors Before They Cost You

How to Catch Inventory Errors Before They Cost You

How to Catch Inventory Errors Before They Cost You

Inventory mistakes rarely start big. They show up as small inconsistencies. A single unit here, a mis-scan there. But over time, they compound quietly eroding profit, breaking reordering systems, and creating confusion across your entire operation.

And by the time you notice? You’re already behind.

The good news? Most inventory errors can be caught before they spiral, but only if you know where (and when) to look.

1. Make High-Value SKUs Part of Your Daily Routine

If you’re going to spot errors early, you have to look where it hurts most. Your highest-value and fastest-moving SKUs.

These are the items that:

Move quickly (which increases the chance of human error)
Cost the most (so mistakes are expensive)
Impact cash flow (because reorders depend on accuracy)

A simple habit: Verify the on-hand count of your top 5 high-value SKUs every morning. It takes 2–3 minutes, but catches more issues than you’d think.

2. Track Your Last 3 Sales & Crosscheck Them

If you’re using Shopify or another system that logs sales, pull the last 3 transactions of each item weekly.

Then ask:

Does the physical inventory reflect that?
Were those items pulled from the correct tray, drawer, or vault?
Any mismatches in size, metal, or variant?

You’re not doing a full audit.

You’re running a logic check on recent activity and this alone often surfaces deeper issues in how products are picked, recorded, or transferred.

3. Spot The Phantom Inventory Before It Haunts You

Sometimes the inventory is simply there just not in the system or in the system but not there.

One common scenario?

The item got returned to the drawer, but not back into your software.

This happens more than you think:

A repair came back and was shelved without logging.
An item was shown to a customer, and returned but not scanned.
A customer changed their mind, and the associate never updated the cart.
Transfers between stores or rooms don’t get logged

To avoid that, check three things weekly:

Run “low stock” reports, not just zeros. Physically verify bins with 1–2 units left. Don’t assume.
Crosscheck special requests or holds. Trunk shows, client previews, and repairs often “borrow” stock without system updates.
Confirm every transfer, even across rooms or team members. No transfer is real until it’s received.
Implement into your workflow. Whenever something comes back, it must be re-logged immediately with location and timestamp.

4. Know Where Things Actually Live

It’s common for a SKU to show “in stock,” just in the wrong location.

Safes, drawers, trays, backrooms… it all blends over time.

Make it a habit:

Pick 1–2 SKUs per day
Check the system location vs where they actually are
Flag mismatches

This will highlight recurring errors tied to unclear processes or bad dropdown choices.

5. Receiving ≠ Verified

It’s easy to “check off” deliveries and move on. But this is your first line of defense against errors entering the system.

Here’s what to do instead:

Match every incoming PO with what physically arrived
Confirm SKU, quantity, and variants (metal, stone, size, etc.)
Have someone log who verified it, initials, timestamp, anything

6. Don’t Skip Cycle Counts, Especially for High-Value SKUs

In theory, everyone knows they should count inventory.

In practice? It gets skipped — especially the small, high-value, or lookalike items.

Instead of one big annual count (which is exhausting), use a light cycle count strategy:

Weekly: Count top-selling SKUs (by revenue).
Monthly: Pick a drawer, display case, or category.
Quarterly: Review dormant or aged SKUs.

The goal isn’t to count everything. It’s to count what matters and catch mistakes early.

And if you’re a lean brand with fewer SKUs or a made-to-order model?

You may be able to count everything monthly. If you have the team and catalog size to support it, do it. It’s one of the simplest ways to protect your margins and stay ahead of stockouts.

What This All Leads To

Spot-checking isn’t about micromanagement. It’s about giving your system a chance to work.

Inventory isn’t just numbers. It’s behavior.

And most errors aren’t tech failures — they’re human habits that went unnoticed.

None of these tactics are complex.

But they are hard to stay consistent with.

That’s why many growing brands bring in outside help to reset their foundation, build lightweight systems, and eliminate the guesswork.

Want help building a smarter inventory system?

We specialize in streamlining operations for high-SKU brands, especially jewelry and custom product businesses.

— Our Insights

September 28, 2025

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