Set up inventory

If you are a new center or a new franchisee, to get started with Zenoti Inventory, you need to set up the opening stock, also known as the starting inventory. This helps businesses to set the stock level and stock value for each center.

Right from the product is manufactured until it reaches the retail stores, different codes are assigned to identify it.

Unit of Measurement (UoM) or just Unit, is the way to define how your company wants to measure a product's quantity. It allows you to quantify and track the products in stock.

In Zenoti, for each product (or product kit), you can define what one unit of the product mean. Generally, for retail products, the UoM is Units, while for the professional supplies it can be ml, gallon, oz, grams, etc.

For example, one of your vendors may supply products in bulk as 50 bottles in one case. So, for the vendor, 1 carton is 1 unit. However, when you receive the delivery, you unbundle each carton and consider 1 bottle as 1 unit.

If your company is into medi-spa and your company offers skin rejuvenation services, each provider must use a specific dosage of the product to provide a service. For example, in the case of Botox treatment, depending on the age of the guest, the provider is supposed to use only the prescribed amount of botox. Here, you must set up the unit of measurement as ml.

In services, you can define the amount of the product that can be used for the service. In case, you are not sure of the amount of the product that can be used, for example, the Hair Shampooing service may need a different amount of the shampoo based on the hair length of the customer. In this case, the staff can add the consumption details. You can restrict the entry of consumption details by only specific roles.

The way you define UoM for a product affects your entire inventory. Especially, when you are raising orders, you need to enter the quantity of the product you are requesting from the warehouse or purchasing it from the vendor.

After you have added products in Zenoti, you might want to edit their details. You can search a product using its name, the tag assigned to it, or its status: active or inactive.

Stock cost is the total cost of your available unsold stock. When you purchase a product at different prices and sell it at a marked-up price, you want to know the cost of your product in stock based on the purchase price.

In Zenoti, businesses can view the cost of on-hand stock based on the perpetual average costing method.

In this costing method, the cost of the product is prorated with every purchase order or transfer order. For any unaccounted increase in stock due to transactions such as audits, there is no change in the perpetual average cost, and the stock is added as per the perpetual average cost.

Formula: Perpetual Average Cost = Cumulative Stock Cost / Cumulative Stock Quantity

Example

Let’s consider the following stock-ins and stock-outs of Hair Shampoo 100ml at your center and calculate the perpetual average cost after each transaction:

If the on-hand quantity of a stock becomes zero, the incoming value of new stock will serve as the new perpetual average.

If the on-hand quantity of a stock becomes negative, the perpetual average is assigned the unit price of the stock lot purchased after the quantity went negative, specifically referring to the stock that restored the inventory from a negative to a positive quantity. The stock cost is calculated based on this perpetual average.

In the above scenario, as the on-hand quantity went negative (-2), the cost of the items purchased after reaching negative quantity was $15 each, so the new perpetual average will be assigned the unit price of the stock lot purchased after the quantity went negative. The stock cost will then be calculated based on this new perpetual average.

If the stock quantity falls into negative values and new stock is subsequently added, the system allocates the cost of goods sold (COG) for quantities below zero to the unit price of the most recently added product.

Example:

When the stock reached a negative value (-2), items were purchased at $15 each. Consequently, the additional quantities are assigned the unit price of the latest product. The new cost of goods is calculated as follows: 10*10 + 2*15 = $130

As the stock went negative (-3), a hair shampoo was added at a unit price of $18. While the stock remained negative (-2), 2 more hair shampoos were added at $20 each. The new cost of goods is calculated as follows: 8*15+ 1*18 + 2*20 = $178

In both scenarios, the cost for additional quantities is determined by the unit price of the latest product procured after reaching a negative stock.

Zenoti allows you to maintain a comprehensive list of vendors that supply products to your organization. When you create a vendor account, you enter information about the vendor that is used to automatically populate purchase orders created for the vendor and to track product deliveries and returns.

A product can have multiple codes assigned to it. A vendor product part number is a code used by the vendor to uniquely identify the product.

Before you start performing any action on a product, you must first make it available or make it active for your center. Usually, your warehouse admin does this for all the centers. However, if you are a franchised business, you can go ahead and do so.

If you have a product that is temporarily not in use, you can go ahead and mark it inactive for your center and remove the vendor-product association. This means, that the product will not be available for your center for any inventory-related transaction.

The vendor account number is a unique identifier for each center to which the vendor is supplying the products. In the case of a franchise model of business, all the franchisees share the same business name. The vendor needs to know which franchises are raising a purchase order and delivering the products to the correct franchise.

Also, in the case of a non-corporate office model of business where each center raises and receives orders individually, the vendor account number is required to differentiate each such center.

In Zenoti, you can enter the vendor-assigned reference number for each center, which gets populated on purchase orders done from each such center.

After you have raised an order with the vendor, you can receive orders from vendors in multiple shipments. This can happen when the products are out of stock or the vendor use multiple shipping providers.

Example: Let’s say that you have raised a purchase order for 50 bottles of Green Tea shampoo. However, your vendor delivers partial shipments as follows:

For the first two shipments, you mark the purchase order as partial delivery and for the third shipment, you mark the purchase order as a full delivery.

Zenoti allows you to receive multiple shipments for a single purchase order. You can record the quantities received on each individual delivery along with a separate invoice number for each delivery. As you start receiving more and more partial shipments, you can view the shipment history for the purchase order. And at any point, if you want to mark the order as delivered, you can close the order.

When you raise a purchase order, you can view the following fields added on the Purchase Order page:

Next step

Complete the following steps:

After you have raised a purchase order, you are ready to receive deliveries. You may receive the order in partial or in full. In case you have already received partial shipments and now you have received a final shipment, you need to mark the delivery as fully delivered.