The Ultimate End-of-Year Inventory and Operations Checklist [updated for 2026]

Now that you are almost through the busy holiday season (phew!), it’s time to start to reflect on the year that has been.

To give you a focal point on this reflection process from an inventory management perspective, we’ve compiled this comprehensive Ultimate End-Of-Year Inventory and Operations Checklist.

Our checklist covers all aspects of your business as inventory is much more than just keeping count of your stock levels: we cover financials, customer service, marketing to production, workshop maintenance, and operations.

Working through our inventory checklist will help you identify any areas that need improvement or where extra efforts should be allocated for the upcoming year.

Ready to get organized and on-track for 2026? Great - let’s get started!

Prepare and Better Organize your Warehouse Space

Put some thought into ways you can change or improve your warehouse / workshop space to maximize efficiency and reduce bottlenecks - having a well organized, clean and orderly space to work can pay dividends in the long term.

☑️ If you haven’t got one already, create a floor plan that clearly demarkates the different areas you have for the different steps of your manufacturing, packing and shipping phases.

☑️ Make sure your raw materials are stored correctly and safely, with clear labels so any staff member can find what they need quickly.

☑️ Use your historical sales data to identify high selling SKUs, and make sure these products are stored in the easiest-to-reach locations for your packing staff.

☑️ Take a look at your pack stations and reorganize where necessary so everyone has a dedicated, well-arranged space to work and complete the pick-and-pack process. If you hire seasonal staff, make sure they also have adequate space to work efficiently.

☑️ Create a designated space for tackling “problem orders” so your team quickly continue to move through your non-problematic orders without getting distracted on ones that need more time to complete.

Document your Production Processes

It’s also a great time to make sure your key processes and workflows aren’t trapped in the heads of a few key members of staff.

☑️ Make sure you have SOPs (Standard Operating Procedures) that cover the steps required to produce and ship your products. Set up a process so everyone has read the SOPs relevant to their role — and can feed their thoughts and experience back into the documentation as needed.

☑️ Also document any training or onboarding processes you follow with new members of your team.

☑️ Make sure all your BoMs (Bill of Materials) are documented — you need a clear record of the quantities and types of raw materials required for each batch you produce.

☑️ Consider implementing manufacturing travelers to document and track each production run, ensuring consistency and quality control as you scale in the new year.

Track your Inventory

As a manufacturing business, it’s essential to be on top of one of your biggest sources of expenditure: your raw materials and finished goods.

☑️ Make sure you have a system for checking in raw materials the moment they arrive from suppliers, so everyone knows what’s available in real time. That process should cover how to unpack and store goods, who handles the task, and how it gets updated in your inventory management system. If you work with materials that require lot tracking or batch tracking, make sure those numbers are recorded and tracked all the way through production.

☑️ Make sure you also have a process to check-out raw materials when a batch is produced, so used stock is removed from your current counts. Keep a close eye on your Work-in-Progress (WIP) inventory levels — you don’t want cash tied up in partially finished products over the holiday break.

☑️ Analyse your material usage to predict future requirements for next year, and establish reorder points for key materials so that orders arrive before you run out of stock.

☑️ Learn about the differences between periodic or perpetual inventory systems to determine which method is best for your particular manufacturing situation.

☑️ Create a plan and schedule for your stock counts, and decide if you will undertake complete end of year stock counts or regular cycle counts through the year.

☑️ Take a deep dive into your inventory shrinkage situation - how much stock have you lost to damage, or to unknown causes. Draw some conclusions from this data and use this to inform your SOPs and staff training going forward.

See also: Complete Guide to Raw Material Inventory Management

Analyze your Financial Picture

Reviewing your financial data will also help you make better decisions going into the new year. This will help you identify areas where you can save money in the upcoming year, and make your business more profitable overall.

☑️ Examine your P&L statement, balance sheet, and cash flow statements to see where you stand financially.

☑️ Identify any areas that you can cut or minimize costs, either with your overhead (indirect) costs or your direct costs of production. This may mean cancelling subscriptions or finding better sources of raw materials.

☑️ Calculate how much inventory you have on hand - if you feel you have too much, make a plan to reduce this via selling at a discount.

Forecast your Sales For Future Success

You need a solid handle on the past to anticipate what’s coming. Your data from prior years is the clearest signal for which SKUs are popular and when — and tracking trends through the current year gives you a firmer read on your production timing: when to make products so they’re ready before demand peaks. All of this feeds into getting your inventory levels right for the upcoming year and avoiding the overstock-or-stockout trap.

☑️ Spend some time gathering your sales numbers and figure out which months were your biggest ones — and why. If you use software to automate this step, make sure you’ve actually read and digested the relevant reports, not just run them.

☑️ Take a look at the same time at any external factors that may influence your inventory decisions for the next year. Consider anything from weather patterns to consumer trends as they can have a more significant impact on your sales than you may at first glance think.

☑️ Plan out an estimated production schedule using your forecasted stock numbers, with room for growth built in. Track your progress with key production planning KPIs to stay on top of your manufacturing goals.

Free Download: Production planning template for Excel and Numbers

Look at your Customer Service Situation

Good customer service matters for every business — but it’s especially important when inventory is involved. Make sure your customer service processes are current and easy to follow, so your team can consistently deliver a great experience.

☑️ Create SOPs for the common scenarios and questions you get from customers. Having consistent ways to handle returns, exchanges, and faulty items means your team delivers quality interactions every time — not just when someone knows the right answer.

☑️ Make sure your policies are clearly documented and visible on all your sales channels.

☑️ Review customer service inquiries and feedback regularly — they’re a surprisingly useful signal for predicting demand. Patterns in what customers ask about (out-of-stock items, long lead times, product confusion) can shape your inventory decisions as much as your sales data can.

☑️ Take a look at customer service requests of the past year and consider how any changes you introduce can improve both your customer experiences and stock management processes in the coming year.

Stay on Top of New Regulations

When you’re heads-down running a busy manufacturing business, it’s easy for new regulations to slip by unnoticed. Year-end is the right time to catch up and confirm you’re compliant heading into 2026.

☑️ Take the time to check for any new laws or regulations that may have been passed in your state or country and take note of any changes that need to be made from a shipping, warehousing and packaging perspective.

☑️ Check for any new requirements related to labeling or safety standards for your products. It’s the kind of thing that’s easy to miss mid-year — and a year-end review is a good catch-all to make sure nothing has slipped through.

☑️ Familiarize yourself with GMP practices and see if you can improve your manufacturing processes in line with recommendations and guidance.

☑️ Confirm your inventory tracking obligations. The IRS requires makers who manufacture from raw materials to track their material usage and COGS — regardless of revenue. Our guide to IRS inventory requirements for small business explains what Publication 334 actually says and what you need to have on record.

Review your Pricing

The end of the year is also a good time to review your pricing and check it still holds up against your growth targets.

☑️ Review your COGM and COGS and check they still reflect your actual costs — current raw material prices, labor rates, and any other factors that have shifted over the year.

☑️ Calculate your profit margins per product and check they still stack up against your growth targets. Start by tallying your unit cost to produce each product and compare it to your average sale price — discounts included.

☑️ Determine if you should raise prices by a percentage across the board or individually, and make a plan to do so across your sales channels ready for Jan 1.

See also: How to increase your manufacturing profit margin: 6 Easy Steps

Review your Technology Situation

Finally, it’s important to evaluate if you have the right technology in place to support your inventory operations for the upcoming year.

☑️ Take a good hard look at that Excel spreadsheet / paper-based system that handles one or more of your operations processes and see if you can find a better solution (especially if you are planning on growth next year 😉). Example: Spade to Fork transitioned from a complex network of custom spreadsheets to Craftybase to prevent costly formula errors as they expanded into brick-and-mortar retail—describing it as their “operational backbone.”

☑️ Check that all team members have adequate access to the systems and data they need to perform their job to the best of their ability

☑️ Make sure you have a clear onboarding process for new team members covering all the technology you use

Read more: How to choose software to optimize your manufacturing process

Craftybase - Your Inventory and Manufacturing Software Solution

Inventory and MRP systems can help streamline and automate much of your internal production processes and give you a better understanding of what is happening in your supply chain.

Using a platform like Craftybase Inventory + Manufacturing can help you plan and manage inventory better. It helps to track daily inventory movements and profitability across multiple sales channels, making it easier to forecast future demand and estimate inventory costs accurately.

The software also automates much of your business’ time-consuming processes such as reordering, tracking lot numbers, expiry dates and more. Try Craftybase for free today.

Conclusion

Having a plan for all aspects of your inventory strategy will go a long way toward setting yourself up for maker success in the coming year.

Use this Ultimate Inventory Checklist to review your business situation and make any necessary adjustments to set yourself up for success in 2026! Good luck!

Learn more about how to manage your raw material and product stock as a small manufacturing business with our handy guide here: What is Inventory Management? The Complete Guide