How often should a small business do inventory?

A small business should count some inventory every month — but not all of it at once. The modern pattern is cycle counting: count a small slice regularly (your top sellers monthly, mid-tier quarterly, slow movers twice a year) instead of one giant annual count. High-value and fast-moving items get counted most because their errors cost most.

The full wall-to-wall count still has a place: once a year for accounting, and whenever records have drifted badly. But annual-only counting means errors compound for eleven months before anyone notices — cycle counts catch them while they're small and traceable.

Two triggers that should prompt an immediate spot count regardless of schedule: an unexplained stockout ('the system said we had six') and any theft or damage event. Both mean reality and records have diverged — find out by how much, today.