Our step by step guide to easy stocktaking
Stock takes. Every business needs to do them, but nobody looks forward to them.
Carrying out a stock check involves counting each individual item of your retailing stock to determine your overall inventory value, mainly for tax purposes. It is usually carried out at the end of the financial year.
It might be a tedious requirement, but it does present an opportunity to make sure that your inventory count is accurate, reducing stock losses and the chance of errors, such as selling the same thing twice. Also, you get to re-familiarise yourself with your products in order to optimise your selling and purchasing strategies.
Follow our step by step guide to easy stocktaking to make the most of your inventory!
Plan in advance
Plan the optimum date and time well in advance. Makes sure you choose a downtime for your business, such as early morning, late night or a weekend, ideally your business should be closed as you can’t process live transactions during a stock take.
Allow time for potential recounts, overruns, or errors; you don’t want to be rushing and making mistakes at the last minute because of poor planning. Schedule any deliveries to arrive either well in advance, or after you’ve checked your inventory.
Prepare your resources
Who will carry out your stock take? You can hire an experienced stocktaking company to take care of the whole thing, or arrange your own equipment and train your team.
If you’re hiring an outside company, you’ll need to get your product file exported and sent to them beforehand. If you’re doing it yourself, you can print it on the day. Ensure you will have adequate staff available and arrange everything you need in advance. Source additional handheld barcode scanners and print out stock sheets by group or department. Consider also getting extra chairs, pens, clipboards, calculators etc., if you need them.
Organise your inventory
Have all your stock organised into groups. Everything should be easy to find and accessible, with clear and legible barcodes.
As far as possible, try to run your stock down in advance, and keep pallets full and sealed, to make your count easier.
Make sure the details of every product you carry, including loose or single items, have been entered into your point of sale system (EPOS) for easy scanning on the day.
Finally, have your stock placed wherever you will need it, as moving it about on the day can lead to counting errors and cause delay.
Work out the details
Decide in advance how you will handle any returned, damaged, or out of date items, so that there is consistency during your stock take. These items are usually set aside before (and during) the count for processing later.
On the day
Label each section or bay in numerical order so that stock can be counted systematically. Have your team count each section and record the totals on their stock sheets. Mark each section number off once the section has been counted, with a tick or sticker – two, if it has been counted twice.
Once counting is complete (more than once if necessary), the totals are then entered into the POS system for review and processing. Each item of stock is valued at its current resell price, even if this is less than expected at the time of purchase.
Check the final figures for accuracy and once you are happy that everything is correct, the stock check reports can be printed and the stock file updated.
You now have important information available for your tax return, but you can also benefit from analysing your findings.
You’ve identified the stock you hold and its value; what more can you discover from this?
Firstly, if you have any unexpected discrepancies, this is an opportunity to dig a little deeper and uncover the root cause. Clearly identifying the issue will allow you to rectify and reduce losses in the future.
Common problems such as label inaccuracies, human errors, supply issues, or theft, may be easily resolved with specific training, automation, change of processes, or additional security.
Next, order any stock items you are low on, and identify your slow moving, damaged, or obsolete items. Discount or write off any damaged or outdated products as necessary, to clear out your stock room and make way for more profitable goods.
This will help you to improve your overall stock holding and movement, so you can stock the right products in the right quantities, and reduce the wastage caused by holding excess products.
Finally, review your pricing strategy. Your stock take will generate a complete picture of your products and pricing, so identify those items that generate the best profit margins, and those which could be improved upon, and adjust accordingly.
Want to know more? Download our ultimate stocktaking guide:
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About the author:
Susan McGuire is originally from London, United Kingdom, and has now lived in Galway, Ireland, for 15 years. She has been with Retail Solutions for almost 7 of those, and during that time has enjoyed various roles within the areas of Maintenance, Finance, & Marketing. You can follow her on LinkedIn!