A stocktake, often referred to as inventory (depending on where in the world you are) is performed by stocktakers and it determines how much stock a company has on its premise’s at any one point in time.
The stock is accounted for by counting, weighing, scanning or measuring, depending on the type of stock on hand the business has.
The stocktake results is then used for several reasons
- Technical analysis
The valuation of the stock on hand is then used to determine the margin been achieved on that department/product line. This information is generated by your accountant and is a vital source of knowledge for accessing your profitability.
The valuation figures are also used to assist in generating management accounts for the business
The stocktake results are also used to determine the shrinkage within the business. Shrinkage can be defined as all stock that is not accounted for.
Reasons for shrinkage include;
- Breakages (which are not accounted for elsewhere)
- Incorrect portion control
- Theft – Internal or External
- Improper distribution/accounting procedures
The results of the stocktake is uploaded onto the customers EPOS (Electronic Point of Sale) which then compares the Theoretical stock levels (what stock you should have on hand) with the Actual stock levels (what you Actually have on hand) and provides a Variance report.
This is vital in identifying
- Which product lines are showing a variance (why it is showing a variance is then analysed)
- Identifies slow moving product lines which can get damaged or become obsolete if not sold/distributed
Efficient stock management has many benefits which are listed below;
- It reduces the cost of holding too much stock
- It ensures that you have the required levels of stock on hand
- It ensures that customers can receive goods on demand which in-turn ensures the sale and avoids “Out of Stock” (customers hate that one!)
- Eliminates overstocking of certain product lines
Efficient stock control far outweighs the cost of the actual cost of the stocktake itself and through careful planning it should be a straight forward procedure.
For completing an efficient stocktake you should consider whether
- Your team have the technology and/or level of competence to complete it in-house to get the results you want
- You should outsource it to a third party professional stocktaking company
Lets face it, stocktaking/inventory control is not the sexiest subject in the World but if done correctly your business will be performing at a significantly more profitable level than if ignored or not managed correctly.
I hope this was of use to you.
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Patrick is Managing Director of Stocktaking.ie, Ireland’s leaders in outsourced stock control. Stocktaking.ie use the best systems and technology to assist customers nationwide in ensuring that the hassle and stress is taken out of in-house stocktaking.
Still want to count your stock in-house? how about a way to EasyCount?
- Digital Stocktakes
- Eliminate pen, paper, Excel and double entry
- Reduce stocktaking time by 66%