Accounting Best Practices, Fifth Edition

16–30. Eliminate All Transaction Backlogs

The warehouse staff gets into serious trouble when it develops a permanent backlog of inventory transactions, usually in the areas of receiving, moves between bin locations, picking, and receipts from the shop floor back into the warehouse. When a backlog arises, inventory records are not being updated on time, rendering inaccurate the reports used by cycle-counters to verify inventory quantities and locations. If cycle-counters use these inaccurate reports, they will undoubtedly find differences between the inventory database and their physical counts, and will make entries into the computer system to eliminate the differences—which will not improve the record accuracy situation once any unentered transactions are included in the inventory database. Thus, a transaction backlog results in permanent inventory record inaccuracy. Further, transaction backlogs tend to create piles of paperwork in which other documents can be lost, resulting in extra search time to locate needed materials.

A crucial best practice is to eliminate these backlogs, usually by allocating extra staff time to do them. Once the piles of paperwork are eliminated, the warehouse manager can focus on increasing levels of training and process improvement to reduce the number of people required to keep the backlog from recurring. Real-time, on-line data entry using wireless bar-coded scanners is an excellent method for having forklift operators update inventory move transactions ...