What is a Stocktake & How to do it?

Stocktaking is the process of manually checking all inventory records that a business currently possesses. It is not only a vital component of inventory management but will also affect your pricing, orders, and sales. Stocktaking may vary from one business to another, but is important for every business establishment nonetheless.

Do not be mistaken by its name – stocktaking covers a wider spectrum than just stock control. All inventory needed by your business should be included in the stocktake. For instance, if you’re a food business, you would also want to record the materials used to create the final product. Running out of these materials is similar, or worse, than running out of stocks.

Why are Stocktakes Important?

Food & beverage business, hospitality ventures, and almost all product-based businesses must ensure complete stock rotation with profitability on each product sold. If you are not doing it already, here are three reasons why you should regularly conduct a stocktake:

  • Tracking Inventory Efficiently

While inventory management systems can help in stock control, relying on them for accurate stocktaking is not a good idea. By comparing your inventory levels at hand and figures from the stocktake, you can identify discrepancies and fix them before they turn into losses. Any mismatch will also indicate poor inventory management practices in your establishment. If you do not pay heed and overhaul practices, it may lead to major issues such as stock loss, overstocking, or running out of stocks.

  • Identify Issues in Stock Control

Product-based businesses often face issues missed by inventory management systems. Theft, pilferage, and missing orders may be a one-off, but recurring issues may indicate a deeper flaw that must be rectified at the earliest.

  • Minimise Losses

When it comes to business profitability, you would not risk leaving anything to chance. Calculating figures like inventory turnover, periodic revenue, and profit margin on each product requires precise figures, which are accurately revealed by stocktaking.

How to Stocktake?

There are a few steps essential to stocktaking, including measures before, during, and after the count. Let us take a look at each in detail:

  • Before Stocktaking

Stocktaking is time-consuming, so you must set a date and time for the count. It is highly recommended to halt operations or conduct a stocktake after business hours to ensure minimal disruptions. Any unnecessary disruption may lead to inaccurate figures.

  • During the Stocktake

During the stocktake, you must ensure the process goes as smoothly as possible. While the chosen method of stocktaking may differ, there are a few basic things to keep in mind. Firstly, include every item on your shelf and storage space. Counting stocks manually can be tiresome, but doing things hastily may result in costly mistakes. So make sure to check everything properly for the best results.

  • After the Stocktake 

Once the count is complete, make sure you record the exact numbers in your inventory management systems. If you encounter a discrepancy, even excess stocks, take steps to address the issue and prevent future recurrences.

The first thing to do is to identify the cause of the mismatch. It may be as simple as a human error or a serious one like theft or supplier issues. Once you understand the cause of the discrepancy, it’s time to rectify it. This may include optimising processes, changing software, or installing additional security measures in your establishment.

How Often Should You Stocktake?

The frequency of stocktaking depends on your inventory & sales volume. The exact answer varies from one business to another, depending on the complexity of your inventory, the method chosen, and various other external factors.

But bear in mind how much time you can afford until your next counting, how often you need accurate figures, and the disruption to your business. Stocktakes can be conducted weekly, fortnightly, or monthly.

Schedule a Stocktaking with the Experts

Hospitality Partners has experienced stocktakers who understand complex business and accounting systems. We will conduct accurate and expedited stocktaking services to help your business minimise stock loss, maximise profits, and meet business goals.

Call us for any queries that you may have regarding stocktaking.