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Inventory Count Tags: Everything You Need to Know in 2024

3.5 Minutes

In this article, we cover what inventory count tags are and some of their common types. We also explore their importance and share our simple 9 step inventory count tag process. Read on to learn more.

inventory count tags

What are Inventory Count Tags?

Inventory count tags are physical labels or tags that are used in inventory management to track and count items in a company's inventory. These tags typically contain information such as item details, quantity, location, and sometimes barcodes. 

Example: During the monthly inventory count, employees tagged 500 units of Widget X and 200 units of Widget Y with inventory count tags and recorded the exact quantities and their respective locations on the shelves.

what are inventory count tags

Importance of Inventory Count Tags

Inventory count tags are important in inventory management for a number of reasons. Some of the most common reasons include:

1. Accurate Inventory Tracking: 

The primary purpose of inventory count tags is to ensure accurate tracking of inventory levels. By tagging each item with relevant information like quantity, product name, and location, companies can maintain up-to-date records of their stock.

2. Preventing Stockouts and Overstocking: 

Inventory count tags help companies avoid stockouts (running out of a product) and overstocking (holding excess inventory). With accurate data on hand, they can reorder products in a timely manner and reduce carrying costs.

3. Efficient Replenishment: 

When inventory levels reach a certain threshold (e.g., a minimum stock level indicated on the tag), companies can quickly identify the need to reorder items, streamlining the replenishment process and minimizing disruptions.

4. Inventory Valuation: 

Accurate inventory counts are essential for financial reporting and determining the value of a company's assets. Inventory count tags provide the data necessary for calculating the cost of goods sold and the value of remaining inventory.

5. Loss Prevention: 

By regularly auditing inventory using count tags, companies can detect discrepancies between actual and recorded inventory levels. This can help uncover theft, shrinkage, or discrepancies due to errors in recording.

6. Compliance and Auditing:

Inventory count tags provide a documented record of inventory counts, which can be crucial for regulatory compliance and internal auditing. This documentation ensures that companies can account for their inventory accurately.

7. Streamlined Audits:

During internal or external audits, having inventory count tags in place simplifies the process. Auditors can quickly verify inventory levels by comparing the tagged information to the recorded data.

inventory count tag

Types of Inventory Count Tags

Inventory count tags come in a number of types and their selection depends on the specific needs of a business. Here are some of the most common types:

1. Pre-Printed Tags: 

These are pre-made tags with standard fields such as item description, quantity, and space for writing. They are convenient for general inventory tracking and often come with sequential numbering.

2. Customizable Tags:

Custom tags allow businesses to tailor the tag design to their specific requirements. This can include adding company logos, unique fields, or barcodes.

3. Barcoded Tags: 

Inventory count tags with barcodes or QR codes are used with barcode scanners or mobile devices for quick and accurate data entry during the counting process. They are efficient for high-volume inventory environments.

4. Color-Coded Tags: 

Tags of different colors can represent various categories or statuses of inventory items. This visual aid simplifies sorting and identification.

5. Reusable Tags: 

Some tags are designed to be reusable and are often made from durable materials like plastic or metal. They are particularly useful for items that undergo regular inventory counts.

6. Radio Frequency Identification (RFID) Tags: 

RFID tags use radio waves to transmit information to RFID readers, making it possible to track items without a direct line of sight. RFID tags are valuable for real-time inventory monitoring.

7. Sequential Numbered Tags:

These tags have unique serial numbers or barcodes that help in tracking individual items or lots. They are often used in manufacturing or for items that need traceability.

the inventory count tags

9 Step Inventory Count Tag Framework 

Use our 9 step Inventory Count Tag framework to maintain accurate and efficient inventory tag tracking. Simply follow the steps below:

Step 1: Define Inventory Count Objectives

Clearly define the goals of your inventory count to ensure effectiveness. Objectives may include validating stock levels or preparing for audits.

Example: XYZ Electronics wants to count all iPhone X units for a year-end audit. The aim is to verify asset value accurately. 

Step 2: Select Tag Type

Identify the most appropriate type of tag for your inventory counting needs. Options include barcoded, color-coded, or customizable tags.

Example: To minimize errors, XYZ Electronics opts for barcoded tags. These tags facilitate accurate counting of different iPhone models.

Step 3: Tag Placement and Attachment

Choose strategic locations for attaching count tags to make them easily visible. Ensure the tags are securely affixed to prevent loss or damage.

Example: ABC Hardware attaches tags to power tool handles using zip ties. This placement aids quick identification during counts.

Step 4: Tag Information

Determine the essential information to be displayed on each tag. This can include the item's name, SKU, or quantity for effective tracking.

Example: XYZ Fashion Boutique tags display product name, size, and quantity. This information aids in an accurate count of clothing items.

Step 5: Training and Communication

Train the team on proper tag usage and emphasize the importance of accuracy. Clear communication ensures the counting process is efficient and precise.

Example: ABC Grocery staff learn to use barcode-equipped tags in a training session. The focus is on accuracy in counting perishable items.

Step 6: Counting Process

Initiate the counting, ensuring each tag's data is recorded accurately. Utilize scanning or manual recording based on the tag type chosen.

Example: XYZ Bookstore employees use scanners to record barcoded tags on bookshelves. This ensures every book is accounted for during the count.

Step 7: Reconciliation and Reporting

Compare the tag data with the records in the inventory management system. Generate reports to highlight any inconsistencies for further analysis.

Example: ABC Auto Parts discovers a 50-unit air filter shortage post count. The tag data and inventory software records didn’t match.

Step 8: Resolution of Discrepancies

Examine and address any inconsistencies identified during reconciliation. Ensure that inventory records are accurate and updated accordingly.

Example: XYZ Electronics finds a count discrepancy in iPhone chargers. A physical recount reveals 20 units are missing, indicating theft.

Step 9: Documentation and Compliance

Maintain comprehensive records of the inventory count, including all tag data. Ensure documentation adheres to regulatory and audit requirements.

Example: ABC Clothing Warehouse documents detailed count records, including tag data. This practice aligns with regulatory and internal audit requirements.

the inventory count tags


TechTrend Electronics is a retailer that specializes in consumer electronics and wants to optimize its inventory management. Here’s how they implemented our simple 9 step process:

Step 1: Define Inventory Count Objectives

TechTrend Electronics aims to conduct a quarterly inventory count to verify the stock levels of their products, including smartphones (e.g., Model A and Model B), laptops (e.g., Laptop X and Laptop Y), and accessories. The primary objective is to ensure accurate stock records and identify any discrepancies for timely reorder decisions.

Step 2: Select Tag Type

TechTrend Electronics opts for barcoded inventory count tags due to their efficiency and accuracy. Each tag will include essential information such as product name, SKU, and location within the warehouse.

Step 3: Tag Placement and Attachment

Tags will be securely attached to the packaging of each product using adhesive labels. Warehouse staff will ensure that tags are affixed to the top right corner of the product boxes for easy access during the count.

Step 4: Tag Information

The information on each tag will include the product name (e.g., "Smartphone Model A"), SKU number (e.g., SKU12345), and the specific location within the warehouse (e.g., "Shelf 3, Row 2"). This information will help identify and count each item accurately.

Step 5: Training and Communication

TechTrend Electronics conducts training sessions for their warehouse staff, educating them on how to use handheld barcode scanners to scan the tags and emphasizing the importance of precise counts for maintaining inventory accuracy.

Step 6: Counting Process

During the quarterly inventory count, warehouse employees use handheld scanners to scan the barcode on each tag. As they scan each product, the scanner logs the count in real-time. This provides an efficient and accurate inventory count.

Step 7: Reconciliation and Reporting

Following the count, TechTrend Electronics reconciles the tag data with their inventory management software. If discrepancies are identified, they generate reports to investigate further. For instance, they discovered a shortage of 15 "Laptop X" units compared to their records.

Step 8: Resolution of Discrepancies

TechTrend Electronics initiated an investigation into the 15 missing "Laptop X" units. After a thorough search, they found that the discrepancy was due to a data entry error which is promptly corrected in their inventory system.

Step 9: Documentation and Compliance

TechTrend Electronics maintains comprehensive documentation of its quarterly inventory count. This documentation includes a record of all inventory count tags used, the counts recorded, any discrepancies discovered, and the resolutions implemented. They also ensure compliance with industry regulations and internal auditing standards. 

We hope that you now have a better understanding of what inventory count tags are and how to implement our inventory count tag framework. 

If you enjoyed this article, you might also like our article on inventory counting or cycle counting vs physical inventory.

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