The art of the stocktake
Stocktakes are important. Learn the benefits of a stocktake and how to do one the right way with our guide.
There's a knack to doing a stocktake. Perfecting your stocktake technique allows you to keep a sharp eye on your product inventory, prevent stock theft and much more.
Learn its benefits and how to conduct a stellar stocktake in this guide.
What is a stocktake?
A stocktake is a staple business process that involves checking all your inventory, counting it manually and recording it accurately. You may have heard it referred to as stock counting.
It has many functions, including checking physical counts of items against data in inventory management systems to ensure they are both accurate.
Why do you need to do a stocktake?
A stocktake is a very reliable way to keep track of your physical inventory. You know exactly how much stock you have after each stocktake, giving you invaluable knowledge to guide what you purchase, make and sell in your business. It also informs you of how much new stock you need to order to meet the demands of your customers.
Another reason to do a stocktake is to find out if there are any inventory errors or issues. Say, for instance, you were ordering hundreds more lavender soap bars than you needed to – and not enough of the mānuka honey ones you were constantly running out of. A stocktake would help bring discrepancies like this to light.
Stocktakes also help you find out if people are stealing from the business or if obsoletion and shrinkage are affecting your profits.
What are the benefits of doing a stocktake?
Stocktakes keep inventory tracking in check with reality
Many businesses keep tabs on their inventory using an inventory management system – but even the snazziest IMS can't come into your business and physically count your inventory.
Doing a stocktake and recording it with an IMS can help you identify stock issues and discrepancies. It also allows you to put the software to the test: if you uncover multiple issues, it may be a signal that you need an upgrade.
Stocktakes help you understand stock levels
You can dig deep into the numbers to see how much inventory you have and if you have enough emergency stock to tide you over if needed. This can also help improve your purchasing and ordering processes.
Stocktakes show low inventory levels
You don't want to leave your customers hanging – so make sure you keep your stock levels topped up in line with customer demand. A stocktake will help you maintain accurate levels and identify your perfect stock order frequency.
Stocktakes can help prevent shrinkage and stock theft
Shrinkage in business is when your inventory stocktake doesn't match what you have on your records. This can occur for many reasons, including human error, supplier mistakes, shipping damage and theft from employees.
Regular stocktakes can help you identify stock issues before they become bigger problems.
How to conduct a stocktake
Follow this step-by-step guide to conduct a stocktake guided by industry best practices.
Step one: make time for it
Stocktakes usually take quite a long time to do. If you have a large and varied inventory, it might take you a few days.
It's advisable to plan for this and clear your diary so the stocktake doesn't disrupt normal business operations.
Slow days and quiet sales periods are good times to schedule a stocktake. You may also want to coordinate it with your deliveries. This could mean choosing a slow period with no scheduled deliveries or cutting off access to the warehouse at a certain point so deliveries don't invalidate the count.
Step two: know what stock you're counting
Not all the stock in your warehouse is eligible for a stocktake. You should only count unsold inventory, leaving out sold inventory that's still in the warehouse but will be leaving for the customer eventually. You should also discount inventory the team has received but hasn't yet recorded.
For accurate tracking, make sure you have a SKU number for each product and unit.
Step three: tidy up
Before you physically start your stocktake, it pays to tidy up a bit first. This will help you avoid tripping over, making a mess and collecting inaccurate results.
First, remove any rubbish and recycling. Next, organise your stock rooms so you can make space for inventory that has been counted already.
Step four: gather your tools
The last thing to do before getting stuck into your stocktake is to make sure you have the right tools for the job. These include:
- Calculators
- Pens
- Stock sheets with inventory descriptions, Universal Product Codes (UPCs) and SKUs
- Clipboards
- Barcode scanners
If you're storing inventory data in the cloud, you may also need the relevant hardware and software to interact with it.
Step five: do it properly
If you are going to do a stocktake, do it properly. Don't try to cut corners by estimating your stock – no matter how much you have to count.
This is where most of your stocktake time will be allocated – but it's a very important and necessary step. Once you've finished your count, see how the numbers compare to the ones you have recorded beforehand to see if they match.
Step six: be open to a recount
If your stocktake doesn't match the inventory levels you had prior, it may be worth doing a recount – just to be sure.
Boxes can be missed, SKUs can be incorrect and items can get counted twice, so it pays to be vigilant. And then, if your new count is proven correct, you can update your systems accordingly.
Step seven: try some new technology
The humble stocktake has remained relatively unchanged throughout the years. However, new stock and warehouse management technology can help you conduct a more accurate stocktake and enjoy optimised business functions, including smoother order management, storage and fulfilment.
Do you need help keeping on top of inventory? When you choose Stowsafe's flexible
product fulfilment service, you get access to our bespoke warehouse management system. For you, this means real-time stock updates and easy access to your inventory management dashboard, wherever you are.
Want to know more? Don't hesitate to
get in touch with one of our experts.
