A retail grocery chain operating multiple retail banners was experiencing a $100 million inventory shrink issue that was getting progressively worse. The operations accounting staff was overwhelmed by the amount of data they were receiving and didn’t have the time to perform the deep dive required to unravel the issues in inventory reporting. To address this issue, they requested our finance & accounting team with deep operations experience to analyze the data they generate to account for inventory by store location and examine their inventory accounting processes.
Jefferson Wells provided a strong Financial Analyst who had the ability to examine and aggregate the data, to help examine the reasons behind the growing inventory shrinkage on the financial statements. Inventory reporting was accomplished through numerous processes and reports and was accounted for differently from store to store (perpetual, cost based, etc.). Additionally, they were using an old accounting software application that did not allow for any type of analytical reporting.
Through a thorough review of each of the reporting processes, we delivered process improvement opportunities to help:
-Standardize reporting across all locations,
-Improve data analytics through reporting, and
-Improve overall inventory shrinkage.