If you sell stock (inventory) in your business, this is how you make money

You can argue that your staff is your most important asset, a new shiny bigger premises will attract more customers, improved financial management will grow margins, etc etc. But you don’t sell any of these. Sales is money and you sell your stock. It is therefore a priority that you give your stock the respect it requires as you have paid to place it onto the shelf its currently sitting on, regardless of if it’s selling or not. So lets discuss how it can be better managed. I acknowledge that yes, staff advise customers as to the type of product, and yes customers will have a pleasant experience in your new shiny store, but at the end of it all, if they want a certain product, you must have it in order to sell it. In this series of 3 articles I will endeavour to outline how to manage your stock as efficiently as possible.

Before we start on this journey, it is important that we provide a health warning and outline that we are speaking here on general terms. A suggestion may/may not be suitable for your exact business requirements but it is, in general a method for working forward to achieving best practice, and the holy grail of stock control – stock levels on your Point of Sale (POS) system that are correct and trustworthy. I hope to achieve two things with you in these articles and assist you;

• in how to achieve optimal stock levels
• have your internal systems optimised

In these three articles we will outline;

1. Before you start – the plan
2. What to do first – how do you eat an elephant?
3. Best practice – tweak and optimise

Although my company delivers stocktakes, lets start by saying, a stocktake is not the starting point. it is a point in the future that you must work towards. All too often, businesses think that by having a stocktake their stock control is now in order. It’s not. In a lot of cases it is a process of satisfying the “accountant” who requires a year end valuation of stock for financial reporting. A dreaded process that creates procrastination and fear and “is it that time of year again?” response. 

Where we want to get to is by having stock so well managed, then when you run the report on your POS, you know that the figure is correct as you have the internal processes to back it up and keep it constantly updated. So what are those internal processes and how can they be implemented?  Before we go there, we must first look at why stock control in hardware premises doesn’t work. In a nut shell, the main reasons efficient stock control does not happen is because of inefficient systems around; 

• ordering/purchasing
• receiving/storage
• selling

Within each of the above, there are several reasons that these do not work and almost always come down to

• no systems created 
• poor communication
• management not willing to implement change 
• inefficient staffing levels
• staffing who are comfortable in doing things “their own way” or are set in their ways
• too busy 
• poor knowledge of IT system 
• involving too many staff 
• no rechecking of accuracy 
• selling similar items incorrectly 

Your starting point is deciding what does efficient stock control look like for your business? This is your goal for your business and only you can decide it. It could be live stock onto your POS, it may be to have parts of your yard stock on the system as this is your highest value item areas, it maybe your paint section that you want to have a full product range fully available. You decide. To achieve this goal, you must have a plan, with a date of completion as to when the goal will be achieved. You will then set milestones for the future on what you will achieve, who will achieve it, and when. Before you start going hell-for-leather in tidying store rooms, barcoding product, and possibly repeating failed systems of the past, you should consider;

• what is the current level of confidence that I currently have in the stock on my PoS being correct? and why? discuss with your team
• Is it barcoded, correct cost/retail price, correct margin, SKU number, on the system at all?
• Staffing – who can/will over see this project? 1 person who is accountable. What challenges are they likely to receive. Can they deliver?
• IT – is my current PoS system fit for purpose? what do I use it for? can it operate a system that will deliver my goal? Can my team use it?

Think about the above ahead of the next article, where we will discussing how we go about creating systems that last, and how to communicate them with your team, for if they are not on-board, then you could be fighting a losing battle.

Patrick McDermott is Managing Director of Stocktaking.ie, Ireland’s leading provider of outsourced stocktaking services, and CEO of EasyCount – counting software for non-barcoded products

Still want to count your stock in-house? Try DigiTally!

• Digital Stocktakes
• Eliminate pen, paper, Excel and double entry
• Reduce stocktaking time by 66%

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5 Quick Steps To Control Your Fresh Food Costs

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Know your margin – Conduct frequent counts of your inventory. This way, you will know your exact food cost. Calculating your margin by dividing purchases by sales and assuming a standard opening/closing inventory value, is simply disguising the truth of poor internal practices. Don’t be lazy!
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Get your team involved – Don’t keep the numbers a secret, make your employees aware of the problem you are trying to solve, this way you are far more likely to solve it and curtail it reoccurring and damaging your margin. Place it in a prominent position in your kitchen/staff canteen.

Still want to count your stock in-house? Try DigiTally!

• Digital Stocktakes
• Eliminate pen, paper, Excel and double entry
• Reduce stocktaking time by 66%

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Optimising your Stocktakes is a key factor in making sure you’re managing your profit margins!

You’re probably wondering if there’s a better way to control your stock taking and counts of your inventory, perhaps different methods & team sizes etc and how to just get more efficient stocktaking. Or maybe you’re wondering how much money you’re losing out on with incorrect stock takes, you will most likely be very surprised!

CNBC published an article back in 2015 that retailers are losing almost $2 trillion due to incorrect stocktakes that cause complex issues such as out-of-stock items, overstocks and returns, this number is only moving higher and higher so this highlights the need for an accurate and efficient stocktaking solution.

https://www.cnbc.com/2015/11/30/retailers-are-losing-nearly-2-trillion-over-this.html

That sure is a lot of money to be lost! a lot of that money should be staying in your business, helping you grow, not halting your development and you finding yourself out of pocket.

Remember, an accurate and proper count of your inventory will also relate to happy customers as stock outages will be avoided – this may then lead to them going elsewhere to find what they’re after, this in-turn means you’re losing customers, trust, revenue and most importantly, losing customers to competitors.

We here at EasyCount have over a decades worth of experience relating to stocktaking so we can help you with managing your stocktakes with these steps;

Have a plan!

Don’t wake up one day and decide “lets do a count of all inventory today”. Firstly start with the question, why do I need a count it? For valuation purposes? for your accountant and financial management reasons? To avoid stock outages? To update your point of sale? To identify stock discrepancies?

Create a plan as to why you need one, how you will undertake it, who will do it, and what will you do with your result. Only you can answer these questions for your own business.

Technology is the way forward

You may still be using pen, paper & Excel, you may have used them for many years and are comfortable in doing so, but don’t you just hate double-entry? And maybe you just want to conduct your stocktakes in-house and not pay for outsourced solutions each time?

Technology is ever growing and more and more business are looking at ways to cater technology to their needs to push themselves up the business ladder and attract more attention. Technology is accurate and easily accessible, it’s constantly changing and looking for new ways to create new solutions to make those mundane tasks much faster.

Instead of using pen, paper & Excel, how about eliminate all those tools are just go for an electronic approach? all your data and counts will be stored in a virtual cloud meaning you can access your stock counts wherever you are, whenever, so long as you have an internet connection you will always be able to keep track of your counts. Most importantly its faster, easier, cheaper and a very secure solution to making sure your data is safe and not on 100’s of pieces of paper with Excel spreadsheets!

If you’re interested in an electronic way to count your stock, head on over to  https://easycount.io/

Physical counting for accurate stocktaking

You may think using technology to count your stock is all you need to do, right? wrong!

Tracking your stock levels by doing a physical count is the most accurate way in making sure your not mismanaging your inventory.

You can have multiple teams count physically for you in larger areas, again this is easily checked, audited and synced with your electronic devices such as EasyCount.

Post Inventory

Now the work really starts for once a count of your inventory is completed, you now need to analyse the results. What are your stock losses? Have you compared scanning margin to your actual margin? Why are these different? Are high value stock lines investigated fully?

In essence, follow the money. Don’t worry too much about missing 2,000 small items at a cost of €0.01 each when you have another piece of equipment at €2,000 which is unaccounted for. Prioritise what is worthy of your time in investigating. A company we worked with recently wanted to priortise their stock control function. Post stocktake, they sorted the results by the largest variance by value, started with discrepancies at over €1,000, once they are rectified, look at over €500. Repeat this process. They now only investigate variance of product of over €50 across thousand of product lines. Most importantly, this must be done IMMEDIATELY after the count of your inventory. Days and weeks later is no good and less likely to yield results.

Final Notes

We hope these small, but helpful tips will encourage you to take accurate stocktakes to ensure your maximizing profits in your business – maybe you wish to stick with pen, paper & Excel although the prospect of going fully digital is something we endorse and that’s why we’re looking to making stocktaking a lot less mundane for future counts.

Still want to count your stock in-house? Try DigiTally!

• Digital Stocktakes
• Eliminate pen, paper, Excel and double entry
• Reduce stocktaking time by 66%

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10 Ways To Improve F&B Stocktakes

Stocktaking is an unpopular task at most pubs & restaurants, but one that is critical to controlling food costs and improving profitability. Yet, when we speak with restaurant & pub owners, many admit that they either do a poor job at it, or do it seldomly. In most cases, the underlying issue is a lack of structure around the Stocktaking process.

With that in mind, here are ten tips to help improve Stocktaking accuracy at your Pub, Club, Restaurant & Hotel

1. Stocktake frequently. For certain items that sell quicker than others you could even apply cyclical counting where you would check them weekly/Bi-weekly. This may help giving more accuracy when placing orders.
2. Complete your Stocktake when the business is closed, either before you have opened or after you’re closed. You cannot take accurate accounts of inventory while goods are being sold. Whatever time you pick, stick with it. If you always take inventory on Tuesdays, but sometimes you do it at night and sometimes in the morning, there will be fluctuations in week to week results.
3. Do your Stocktake before a new delivery arrives and then add the new stock to your counts. Do not attempt to do this while deliveries are being made as double entry will be unavoidable.
4. Clean out and organize your stock areas before commencing your count. Throw out items that have expired, move similar items to the same shelf, face off everything and make it as easy as possible to count everything quickly and in general, tidy up.
5. It could be efficient also to use a stock management or counting app, This sometimes can ease the rush of doing a Stocktake and can also help with cyclical counting for certain items. Something like EasyCount for example.
6. When taking inventory, make part of the practice ensuring that items are being used on a First In, First Out (FIFO) basis. Older goods should be rotated to the front of  shelves so they are used first and will not go out of date. Additionally, try to keep the amount of items you have on hand before doing your Stocktake as low as possible to reduce theft and spoilage.
7. Make sure that at least 50% of your count is spot checked. Doing this Ensures complete accuracy and transparency in your results, This would even be the case if you were using external Stocktakers as it is your stock you need the levels to be spot on.
   
8. Use the same Stocktakers to do your Stocktaking. They will not only increase in productivity, but they will tend to be more consistent also.
9. If you use scales to weigh inventory and measure portions, calibrate them as necessary.
10. Standardize what your unit cost is. The price of many items (like ground beef) changes week to week. Use the latest price paid as the standard. It is the easiest to find and remember

This video showing the 8 Different types of waste in LEAN is a great insight into other ways to increase efficiency and all of this coupled together will definitely improve your Stocktakes.

The most critical piece of the Stocktaking puzzle is consistency. Using the same Stocktakers, Stocktaking at the same time and counting the same items are some of the easiest ways to improve your accuracy.

Still want to count your stock in-house? Try DigiTally!

• Digital Stocktakes
• Eliminate pen, paper, Excel and double entry
• Reduce stocktaking time by 66%

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The 7 Golden Rules of A Stocktake

An accurate Stocktake helps you make the correct decisions about managing your business.

It allows you to reconcile physical stock to the stock levels, identify variances, and discover issues with stock management and control.

With accurate knowledge about stock movements and stock on hand, you can make informed decisions about theft/shrinkage, slow-moving items, damaged stock, technological discrepancies and warehouse processes.

Here are my top tips to have a smooth, successful and stress-free stocktake.

1. Clearly identify what stock is owned by the business and all areas to be counted

Separate stock that’s been invoiced to a customer, but is still in store. Likewise, stock received but not yet recorded, should be distinguished.

Make sure stock held at different locations or on lay away for deposit items and such, is accounted for.

2. Make sure the stock room is clean and tidy and stock items are clearly laid out.

Attach labels to shelves to clearly identify different departments; eg, categorise products and label stock not to be counted etc…

Give stock takers clear guidance on the way they should count; eg, start at the top shelf and work your way down, while working from left to right. This provides clear instructions and if this process is carried out correctly can be helpful in identifying discrepancies.

3. Tools for the stocktake

• Hand held scanners – For bar-coded inventory.
• Trained Stocktakers – Untrained Stocktakers may not fully understand the process.
• Supervisors – To spot check certain areas to ensure maximum accuracy.
• Preparation – Although not necessarily a tool, good prep can shave a lot of time off your Stocktake.

4. Discourage radios, mobile phones, earphones and idle chit chat

While it might seem unnecessary, distractions can easily lead to errors. Errors lead to inaccurate reports, Thus Undermining the whole effort of the Stocktake.

5. Count every product in stock. Don’t estimate!

It might seem tedious, And you may think there are only a certain amount of items while looking at them but always count everything physically to avoid human error, it’s much better to get a 100 percent accurate record the first time.

Just because the carton says there are 24 items in the box doesn’t mean there actually are. This goes for items in boxes on the shop floor also, Confectionery & sweets often come in a small box with the quantity on the outside. Even if it looks full it could have a small amount of product sold, So double check!

6. Check the physical count against Live Stock levels. Recheck discrepancies

Make a note about variances and follow up where necessary. This can be useful information for Stocktakes after this, If the same discrepancy pops up again it could be an easier fix second time around.

 7. Update your records

Once the Stocktake has been finalised, update Your stock levels in accordance.

A well-planned Stocktake will result in minimal disruption, accurate inventory records and provides a basis for making well informed business decisions from top to bottom.

Still want to count your stock in-house? Try DigiTally!

• Digital Stocktakes
• Eliminate pen, paper, Excel and double entry
• Reduce stocktaking time by 66%

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5 Most Common Stock Management Mistakes.

Improper stock control can ruin your business. Be aware that we’re all prone to making costly mistakes that can spell the end for your business, Even Nike wasn’t immune. In the early 2000’s, lack of stock control led to the loss of, hold your breath, approximately $100 million in sales. That is a big loss for any company, even a company the calibre of Nike.

After all of the hullabaloo, Nike’s stock price plummeted 20%, It was slapped by several class-action lawsuits, and became the poster child for inefficient implementations. Fortunately, they were able to bounce back by using a better stock control system. If it can happen to one of the biggest companies in the world, it can happen to you too.

We’ve rounded up the top 5 Stock management mistakes businesses make and the possible solutions:

Failure To Accurately Forecast Demand

Nike’s problem, Like most stemmed from inaccurate forecast demand,  Its software had bugs and errors and produced inaccurate forecast, which they used for their manufacturing plan. As a result, They did not have the products that were in demand and had too much of the products that were not selling. A perfect example of exactly what you do not want going wrong with your stock.

Stock control systems, first and foremost, must be free from bugs and data errors. Demand forecasts are critical to producing the right number of items and if the calculations are off, you’re in trouble, especially if you’re running a wholesale business. There are quick and easy ways to avoid this, Use an external Stocktaking company and outsource counting from the business. Alternatively use a cloud based stock management app to keep on top of it all yourself. However above all else a live stock system gives you maximum traceability and would help contribute to lowering shrinkage.

Lack Of Automation

If you’re still tracking inventory with Excel, or with pen and paper, then you could be losing money. Manual tracking of stock in & out takes too much time and won’t get you accurate results. You’re wasting time and valuable resources  that keep you from focusing your energy on other areas that can help grow your business. There’s also the fact that manual tracking means that you’re vulnerable to human error, as well as employee pilferage. And we’re all human!

There are many case studies for companies that have increased revenue through efficient stock control. Tasks can be automated, cutting down on staff hours & thus saving money which can then be put back into the company leading to increased growth.

Improper Training

For companies who are using software that’s installed on local computers, issues are common because not everyone knows how to use it correctly. When there’s so much to do and only one person who’s familiar with the system, you can get left behind in orders. Lack of proper training can severely affect your ability to keep up with orders or worse, result in wrong products being sent out, which will cause both customer satisfaction and retention levels to drop.

Cloud based stock management systems are beneficial in so many ways:

• They have easier learning curves and it shouldn’t take long to train employees properly.
• Easy access for those who travel a lot and multiple employees can log in remotely at once.
• No need to have separate people process orders, check stock, or track inventory.

Inefficient System Implemented Inside The Warehouses

It’s not uncommon for warehouse managers to fail in finding more efficient ways to handle business as they are warehouse managers not business owners. Simply rearranging goods so they’re easily taken out for shipment can save you massively on your bottom line. Often times, employees take too much time looking for an item which may be misplaced or if your stock levels are incorrect may not even be there. Always remember that wasted time is money lost.

A simple solution is to figure out which items sell more and place them near the shipping area so they can easily be dispatched. Sales & demand reports should give you a good idea which items to put close to the door. Additionally, don’t randomly put stock where there’s available space just because its free. Allocate each product a specific area based on popularity so they can be easily retrieved.

In order to make sure the flow of goods is optimized and minimize bottlenecks. Efficient time management spent on counting, picking, packing and finally moving each shipment through the handling system. If you can’t figure out how to get the workflow right in order to minimize the amount of time spent here, consider investing in consultants who will be able to advise you on this.

Less Frequent Stocktakes

Many companies cease operations for a day to check inventory. This can result to profit loss. It’s worse for huge businesses that have so much inventory; they can end up profitless for weeks.

This is an outdated method and one that’s not productive at all. You’re better off scheduling more frequent regular stocktakes to keep the company from shutting down operations and missing out on sales. In addition to this, even if you do find a discrepancy during your stocktake, it will be difficult to pinpoint the problem when you have the time-frame of an entire financial year or to look back on.

There are many ways to keep on top of your stock. Operating a live stock system and performing more frequent Stocktakes will help eliminate profit losses to an extent. Using live stock and performing regular Stocktakes gives you 100% accuracy and confidence in your numbers. This may even translate into converted sales as sales reps with more visibility and clarity on stock levels will be able to communicate more confidently knowing they have the product the prospective customer wants!

Inventory management can be tedious, However using a streamlined process with the correct tools, will greatly reduce mistakes and improve operations which can lead to more sales and overall better business.

Still want to count your stock in-house? Try DigiTally!

• Digital Stocktakes
• Eliminate pen, paper, Excel and double entry
• Reduce stocktaking time by 66%

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How do YOU choose the right Stocktaker?

• Anyone can count!
• I undertake the stocktakes myself – sure aren’t the staff here anyway
• I’m always here myself
• my accountant doesn’t think I need a stocktake
• Its too expensive to do a stocktake
• I tried outsourcing it before and they were a nightmare
• I hate stocktaking!

Believe it or not, the above points are the most popular reasons for people not undertaking stocktaking with Stocktaking.ie.

For us as a business that provides businesses with a 100% accuracy service we do find it surprising.
With stocktaking in general, it is not a sexy or glamorous subject, but think about the consequences of

1. not undertaking stocktake correctly
2. not undertaking the stocktake at all

If you have a business that either undertakes the stocktake for you, or you undertake the stocktake yourself, we would like to ask you this… What measures are in place to ensure that

• the count is correct?
• your product file/information is being used?
• figures are not being “plucked from my arse”(as a shop owner once told us about his current stocktaking company)?
• are there rechecks being undertaken
• information being presented is not being distorted so as to make it “look” right?

Profitability is measured by accurately having a control on your margins. If your stock is valued incorrectly then you face making incorrect decisions based on inaccurate information.

Still want to count your stock in-house? Try DigiTally!

• Digital Stocktakes
• Eliminate pen, paper, Excel and double entry
• Reduce stocktaking time by 66%

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For many business owners they work hard, potter along with the everyday tasks, and for many businesses, they haven’t looked at their margins in quite some time.

You’ll find loads of advice on having a website or an offer, an option to buy online; all needed for certain types of retailers as we know. How about though for the everyday retailer who maybe just wants an extra bit of cash to play around with, is there ways to increase profit with ease that won’t add cost or huge effort?

Here are 9 ways to increase profit margins;

1. Increase prices.I don’t mean to hike up the cost of everything in your store, but check if there’s areas we you may be undercharging or could get a bit more back without ripping people off.

2. Choose products wisely. Are you offering a product that isn’t selling, it’s just taking up shelf space, space that could be used to host a new market offering that people want and need.

3. Use discounts wisely. Don’t give discounts when you are stuck for money, but to entice customers in at a quiet time of year. Plan, so your customers know and you are careful not to lose out by giving too much away.

4. Cut waste. Get as much out of the staff and resources you have without paying for more. Just be careful not to overwork your staff as they are a great asset to your business.

5. Be smart with scheduling. Do you open at 7 but not get busy until 9? Don’t have all your morning staff on at the same time if not all are needed. On the other hand, if the weekends are busier don’t have the same amount of staff on as during the week. Always ensure however that you have enough staff on, people don’t have patience and long wait times can lose you customers.

6. Know what you are giving away. Seeing exactly what each employee is getting paid makes the costs of their effort real to you.

7. Use as few suppliers as possible. The more suppliers you deal with the higher the costs of deliveries and accounts admin. When you buy from fewer suppliers you may get a better deal on pricing, you will build a relationship which may allow free shipping or even exclusive offers. Adding to this the reduced cost of admin, ensure though that they are providing the best products for your customers.

8. Know your stock levels. A knowledge of the levels of stock you have in your store is essential, knowing what, when and why to order products to ensure stock on hand is used. These cuts back on storage space needed (warehousing) and most importantly for perishables, waste due to spoilage is reduced.

9. Figure out where your losses lie. Do you have a high amount of losses that are unaccounted for? Figuring out where these losses are in your business will go a long way in increasing profits.;

If it’s waste- Find ways of controlling this, account for everything thrown away or used by employees so every item used is accounted for.

If it’s theft- Find out who the culprit is. It could be your customers, staff taking stock or giving discounts to their friends, incorrect pricing or overcharging from suppliers.

Once you have figured out where your highest losses are coming from, plan to combat this. This could be employee training employees, installing cameras or something else.  Have a read of our blog on 10 ways to reduce stock losses in your company for more ideas on how to combat losses.
Consider when the best time to carry out this evaluation of your profit margins is, we would advise to do this after you have carried out a stocktake of your full premises. Start afresh, go forth and boost profits…

Still want to count your stock in-house? Try DigiTally!

• Digital Stocktakes
• Eliminate pen, paper, Excel and double entry
• Reduce stocktaking time by 66%

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