Performing a complete stocktake once or twice a year is absolutely essential for maintaining healthy inventory levels and minimizing losses in retail and wholesale businesses (not to mention keeping the accountants happy).
But they can definitely be time-consuming, energy-draining, and frustrating.
And without a clear plan for success, you face the risk of serious human errors – like overcounting or undercounting – that could cost you thousands of dollars and lost customers.
So, how do you stay organized and get things done quickly?
By developing a well-structured stocktaking process that employees and managers can follow together, thereby limiting the possibility of your staff making costly mistakes.
A well-structured stocktaking process will include all the steps required to keep your staff working efficiently to uncover discrepancies and inaccuracies while keeping them engaged and focused.
Here’s our list of 10 fundamental steps that you should include in your stocktaking process for maximum effectiveness.
Try to find a time that works for you and your staff that won’t hurt your bottom line or create unnecessary distractions. A lengthy stocktake is best taken during a slow sales cycle or outside of normal business operations.
A clean and well-organized stockroom will make it easy to find and count your stock to reduce the possibility of miscounting.
Another measure you could take to make the stocktaking process more efficient would be to create well-defined sections by labeling the shelves that stock is and should be stored on, along with using package labels that clearly identify what’s inside the package.
Before you begin the stocktaking process, you’ll want to make sure everyone has the tools they need to get the job done.
Here’s a list of the most common tools used for stocktaking:
You might need more or fewer tools than the ones listed, but this should give you a general idea of what’s generally required for an effective stocktaking process.
The goal of a complete stocktake is to get an accurate count of the inventory you actually have so that you can compare it with your existing inventory data.
So be sure to exclude items that have already been invoiced to customers but haven’t yet shipped, as well as raw materials that have arrived but haven’t yet been entered into your inventory system.
Stock that hasn’t shipped is essentially not yours anymore. Processing materials that haven’t been added into your inventory management system is a separate task that doesn’t need to be done during a stocktake.
A supervisor should be overseeing the stocktaking process at all times. They should have a list of what needs to be counted and what ought to be in their warehouse so they can double check the work of the stocktakers.
The stocktakers should know what groups they’re in, what tools they need, how they’re going to count the stock, etc.
Also, supervisors should make sure that there are practically zero distractions – that stocktakers aren’t distracting themselves with their phones or with too much conversation.
At the same time, if your stocktake is going to last a long time, it may be wise to schedule breaks to keep everyone’s minds and eyes fresh so that they don’t make too many mistakes.
Whether you have a massive warehouse filled with various types of inventory or a small stockroom with just a few types, let stocktakers know which sections they’ll be counting in what order.
Then, create a clear system for how they should physically count your stock.
Here’s an idea for how to organize the actual counting part of the process:
With a similar process, your counting should be well-organized and operate smoothly.
If you have a box that says it contains 10 widgets, don’t just take that label on face value. Open the box and count all of its contents to ensure it does contain that exact amount.
Your stocktaking process should aim to deliver as close to 100% accurate readings as possible, which means you shouldn’t estimate or guess on any number.
And be sure to record any discrepancies between the counts listed on your stock sheet and the number of items you counted, as well as any mislabeled/packaged boxes for quality control.
Once you’ve counted all your stock, make sure you have the most up-to-date prices for all of it.
The price of your stock should match the market clearing price or the price that consumers are willing to pay for that item.
And be sure to include any depreciation as well.
If you purchased a certain raw material last year for $1,000 but now it is only valued at $750 then you need to change prices to reflect the lower price – the same goes for older products you’re now selling at a discount.
During your stocktaking process, you may find that items you thought were in your warehouse were actually missing, and that some items that have been damaged or spoiled were never reported.
You might also notice that some items are simply not selling.
With this data in hand, you can begin brainstorming ways to increase security measures to protect against thieves, improve warehouse policies to curb reckless behavior and implement new strategies for selling more stock.
One sure-fire way to help in all these areas is through inventory reduction – creating a plan for optimizing the amount of inventory stored in your warehouse.
Your stocktaking process shouldn’t be a static set of procedures; it should grow and evolve every time you do it so it becomes more efficient over time.
Encourage your stocktakers and supervisors to suggest improvements, develop new procedures for a more effective workflow, and brainstorm ways to decrease your stock to manageable levels that reduce waste.
But if you really want to improve your process, then consider investing in new technology that can streamline your stocktake and make it easy to track your inventory throughout the year.
With a cloud-based inventory management system that integrates barcode tracking, organizes your inventory into family groupings, automatically tracks your inventory in real-time, and generates up-to-the-minute reports on your stock sales you’ll save time and money both during your stocktakes and year round.
Check out our inventory management features today!
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