Mastering Inventory Counts for Wholesale Distributors in NetSuite ERP

I still remember my first experience overseeing a physical inventory count. At the time, I was an accounting consultant with one of the Big Four firms, assigned to a client to help streamline its inventory management process. The client was one of the large brands in healthcare consumer goods wholesale distribution and had to deal with enormous amounts of stock at several locations. It was a chaotic, all-hands-on-deck process that disrupted our entire operation for days: we closed the warehouse, stopped fulfilling orders, and scrambled to count thousands of products by hand. The process was exhausting, riddled with errors, and by the end, I found myself questioning: Is there a better way to do this?

The answer, of course, was yes.

Over the years, I’ve learned that physical inventory counts don’t have to be painful. In fact, they can be streamlined into a smooth, efficient process that provides valuable insights into a business’s stock levels, financials, and operational efficiencies. This is particularly crucial for wholesale distributors with revenues between $20 million and $80 million, where inefficiencies in inventory management can directly impact cash flow and profitability.

This blog examines best practices for wholesale distribution companies to optimize inventory counts with NetSuite ERP, the leading cloud-based solution for inventory management.

Table of Content:

1. Why Physical Inventory Counts Matter to Wholesale Distributors
2. Common Challenges in Physical Inventory Counts
3. How Cycle Counting Revolutionized My Approach
4. Best Practices for a Successful Physical Inventory Count with NetSuite ERP
5. Why NetSuite ERP is the Best Inventory Solution for Wholesale Distributors
6. Final Thoughts

Why Physical Inventory Counts Matter to Wholesale Distributors

For a wholesale distribution business, inventory holding costs range from 20-30% of total assets. Effective inventory control, therefore, is a key strategic priority.

Accurate inventory counts enable the company to

• Forecast demand and prevent stockouts or overstock situations.

• Monitor theft and shrinkage.

• Enhance financial reporting and budgeting.

• Increase operational efficiency along with customer satisfaction.

Without such a robust system like NetSuite ERP, discrepancies in inventory records may further contribute to the inaccuracy of financial reports, compliance issues, and lost revenues.

Common Challenges in Physical Inventory Counts

The most common challenges faced by wholesale distributors include:

1. Manual Counting Errors – The use of paper sheets and count cards results in unavoidable human errors.

2. Labor-Intensive Process – The time and manpower involved in counting disrupts the normal running of business.

3. Inventory Freezes – Most companies have to shut down operations to finish the count, which results in lost productivity and lost sales.

4. Outdated Data – If you're only counting once a year, discrepancies build up and can make reconciliation a nightmare.

The good news? There’s a solution: cycle counting with NetSuite ERP.

Also Read: Apa Itu NetSuite dan Manfaatnya bagi Bisnis Anda

How Cycle Counting Revolutionized My Approach

Working with clients in the Big Four, I realized that instead of waiting until the end of the year to conduct a full-scale count of the inventory, cycle counting was far better. This is a method of counting smaller sections of inventory on a regular basis, which might be daily, weekly, or monthly, depending on the needs of the business.

Wholesale distributors who implement cycle counting within NetSuite ERP gain:

• Minimized Operational Disruptions – No need to shut down operations to conduct a full count.

• Reduced Errors – As inventory is being checked in small bits, it catches the discrepancy and corrects it much more quickly.

• Improved Accuracy – Real-time updates mean more reliable inventory records.

• Enhanced Efficiency – Workers can integrate cycle counts into daily routines without setting back productivity levels.

Best Practices for a Successful Physical Inventory Count with NetSuite ERP

Wholesale distribution companies can ensure the highest level of inventory accuracy by following these best practices within NetSuite:

1. Prepare in Advance – Ensure that all inventory transactions are up to date before the count begins.

2. Use Technology – Barcode scanners, RFID tags, and NetSuite’s inventory management system greatly reduce errors.

3. Segment Inventory – Categorize items by volume, value, or movement frequency to prioritize high-risk areas.

4. Assign Dedicated Teams – Allocate experienced employees to conduct the counts rather than temporary staff who may not be conversant with the inventory.

5. Count During Low-Activity Periods – Do the counts before the start of shifts or during other slow business hours.

6. Apply Smart Count Systems –The Smart Count system, such as NetSuite's, automates cycle counts and offers real-time data.

7. Investigate Discrepancies Immediately – Errors should not be waited on until the end but investigated immediately.

8. Document the Process – Maintain a record of the counts, errors, and resolutions for future reference

Also Read: Demand Planning: Mengapa Ini Penting untuk Bisnis Anda

Why NetSuite ERP is the Best Inventory Solution for Wholesale Distributors

NetSuite ERP has an end-to-end comprehensive inventory solution for wholesale distributors. Some of the benefits which come associated with it are:

• Real-time visibility into stock in multiple warehouses.

• Automatic cycle counting, hence minimizing manual errors and keeping your stock at optimal levels.

• Advanced forecasting for inventory to meet demand precisely at all times.

• Integration with seamless order fulfillment to enable better customer experiences.

• Scalability supporting business growth past $80M revenue.

Final Thoughts

Inventory counts are not just about warehouse efficiency; they are about maximizing wholesale distribution profitability. Replace traditional, disruptive year-end counts with a technology-driven cycle-counting process using NetSuite ERP for dramatic improvements in accuracy, reductions in labor costs, and assurance that stock will be on hand when needed.

Looking back, I wish I knew then what I know now. But those lessons paved the way for a better system-one which I now implement across businesses I work with. If your inventory process feels like a never-ending headache, maybe it's time for a change.

Are you a wholesale distributor looking to track your inventory? Let's discuss how NetSuite ERP can help your business scale efficiently and improve profitability.