Given that we've rolled over into a new financial year it would be a timely decision to reflect on the last...
If you are a stock-based business, the importance of doing a stocktake is paramount. Whether you are in the hospitality industry, retail, wholesale or manufacturing - you need to have a clear picture of where your business is at.
So, what is a stocktake?
A stocktake is a physical act of checking and counting the quantities of the stock held in an inventory or warehouse. The frequency of stocktakes varies from business to business. Much of the time, we have seen many companies never undertake a proper stocktake regularly. Why is this? Many reasons including, a failure to see the importance, they are time-poor, or sometimes it's just put in the 'too hard' basket.
How to conduct them
There are various ways to go about stocktakes, dependant on what type of business you are, the amount of stock and how that stock is held. But the main things are:
- Have everything ready - Do you have your stock sheets ready or hopefully you use cloud-based inventory so you will have a mobile device to use. Are scanners ready? Clipboards, pens, calculators, marking instruments, i.e. chalk. Do you have steps, ladders, and kneeling pads?
- Set a date and stick to it - choose your time wisely, one that won't interfere with the business and ensure you have adequate people to assist in minimising the time taken to complete the stocktake.
- Prepare your stockroom - make sure it is clean and organised and that all items are accessible by anyone. I.e. If there are items at a great height, ensure they are accessible.
- Define your methods - where will you start and where will you end? Is everyone on the same page? Do they all know what is required of them and where? Who will count what? Who will get those items placed at heights?
- Make sure every item is counted; there should be no 'guesstimates' if possible. Do not make assumptions that current stock reports are correct if an item is difficult to count or access. Chances are current numbers are wrong. You will need to check over all areas of the stockroom so that nothing is missed. For loose or damaged items perhaps place them in a bin - they will still need to be accounted for.
- Validate your stock - Record your physical counts on either your stock sheets or in your online system and check them against your current inventory records. Be sure to highlight any discrepancies and deal with them accordingly and update your records.
- Lastly, think about any issues you had with this stocktake - not enough people to complete in a timely manner? Stockroom not organised enough? Not enough equipment, i.e. scanners, ladders and kneel pads? Make a note of these issues to ensure when you're planning the next stocktake; they don't arise.
Why are they important?
You should be doing regular stocktakes to ensure the following:
That your stock levels are accurate which will ensure you avoid:
- Identify any damaged stock or misplaced returns
- Alert you to theft or bad habits
- Allows you to monitor and increase your gross profit, improve control of allowances and also reduce waste
- You may also detect slow-moving items and a need to improve your pricing
- They may highlight any issues with warehouse processes
We always recommend utilising an inventory management system. Many people believe that if they have the system that they will not need to do stocktakes. This simply isn't true. It is true that with many inventory management software platforms that they have excellent reporting capabilities. But those reports will still be inaccurate if stocktakes, and at the very least, spot checks are not undertaken.
If you're not using a stock management system or unhappy with your current system, get in contact with our team. We'd be happy to help you reach your stock management goals.