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How to do a stock take: a guide to taking inventory and stock control

3-minute read

Simply Business Editorial Team

Simply Business Editorial Team

30 July 2021

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You need to be on top of stock control to make sure you’re accurately measuring efficiency and performance.

But what is a stock take and why is stocktaking an important part of running a shop or warehouse?

What is stocktaking?

A stock take is the process of checking your inventory – how much you have in stock, as well as the condition of goods – and recording the results in a report.

Stocktaking helps with your stock control. For example, if you sell food, you’ll need to know when items are due to reach their sell by date so you can refresh the shelves when necessary.

A back order, on the other hand, is when you accept orders but have temporarily run out of stock in your warehouse.

The types of goods you sell will usually determine how often you should do a stock take. As above, food and drink businesses should check their stock regularly, as their goods are perishable.

But other businesses might choose to do an annual stock take – it depends on the specifics of your business.

A stock take helps you:

  • keep track of inventory
  • see if your ordering process is efficient
  • reduce over-stocking, or stockouts (when you run out of goods to sell)
  • uncover problems – for example, issues with your supplier, or theft

How to do stocktaking

1. Choose how often to do stocktaking

There’s no getting around the fact that a stock take is time consuming and laborious. You need to dedicate time to the process, which should help you limit distractions and errors.

You’ll need to work out how regularly you’re going to do stocktaking:

  • periodically – you might want to do stocktaking every month, quarter or half-year, over a day or two
  • annually – this might be a bigger undertaking than a periodic stock take, but an annual stock take could make sense for your business – for example, if you have inexpensive, non-perishable goods
  • continuously – this is where you plan for continuous stocktaking depending on the types of items you have in stock, for example you might check some items monthly, others weekly, and some daily – and then update your stocktaking records continuously

2. Print your stock take sheets

Your stock sheets form the basis of your stock take. You use them to record your new count, against what should be there. The stock sheets should use the most up to date records you have.

These should be embedded in your existing stock control system. Many software packages let you print stock sheets in a couple of clicks.

But be sure to use the stock sheets in the right order:

  • count what’s on the shelves or in the warehouse first
  • then note that down against what your system says should be there

Otherwise, using the sheets as the basis of your count can lead to errors.

3. Organise your stock before the stock take

Make sure you set aside any stock that’s already been sold, but is yet to be delivered or picked up by a customer.

As part of this, you should also pause all purchases and sales, because it’s very likely that you’ll get in a muddle if you have shifting stock while you’re trying to do your count.

After this, you should start categorizing your existing stock. Make sure your stocktaking area is clear and clean to minimise the risk of errors.

Your total stock will likely fall into a number of different categories and it’ll be easier to properly account for everything if you develop a system to start with. This might involve physically moving items around your premises, sorting them into categories, and counting on that basis.

4. Organise staff

If you have staff helping out with your stock take, make sure that they’re properly organised. Once you’ve categorized your stock, you could appoint a separate staff member to each category.

Remember to appoint more staff to larger categories. You should also minimise any distractions – ask employees to switch their phones off and avoid using the radio, for example.

So nobody burns out, you should take breaks during the process. Stocktaking isn’t fun and it’s important to regularly recharge.

5. Stock control doesn’t involve guessing

Accurate stocktaking requires methodical counting – no guessing. Mark items as you go in order to avoid duplicate counting.

Again, you can simplify the process significantly by using logical categories for stock, and by making sure that any sold items have already been removed from the areas being counted.

Plus, remember to simply count items on the shelves first, before using your stock sheet or looking at your stock control system to see what should be there.

6. Validate your stock take

Once your count is finished, you need to validate your stock take. Compare the results of the count to the stock records you printed out earlier. Any inconsistencies should be noted and accounted for – for example, you need a procedure in place for dealing with damaged items.

If you have multiple branches, make sure that you’re properly tracking store transfers, and that purchase orders are being effectively dealt with.

Discrepancies can be serious, so it’s important to investigate their cause. Is an item simply in the wrong place, is there an issue with your supplier, or are there problems with your stock control system in general?

The good news is that a stock take is the first step to solving a problem, so you can make sure that it doesn’t happen again.

7. Update your stock records

Finally, you need to update your stock records with the results of your latest count. If you’re using a software solution to track stock, this should be a simple process. If you’re still using paper-based systems, you could consider moving to a digital alternative.

Is there a stock take app?

Yes – there are stock take apps that make the process much easier. Sometimes inventory management comes as part of an overall software package, like Zettle or Zoho.

Otherwise, there are dedicated apps like Sortly that can help with your stock control. Be sure to research your options and choose the software that best suits your business.

Useful small business guides

Do you have any top tips for stocktaking? Let us know in the comments.

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Simply Business Editorial Team

Written by

Simply Business Editorial Team

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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