5 Tips for Doing a Successful Stocktake of Your Business
Conducting a stocktake can be challenging, but it's necessary. Follow these tips to conduct a smooth, successful and stress-free stocktake.
Performing a complete stocktake once or twice a year can be a headache. While it is essential for businesses that hold stock to conduct periodic stocktakes, they can definitely be time-consuming, energy-draining, and frustrating. But the good news is that with proper preparation, stocktakes can be conducted as smoothly and accurately as possible. Doing a successful stocktake will not only help you understand your sales pattern and theft-prevention needs but will also offer you a valuable insight into warehouse processes and matters related to damaged stock.
Keeping this in mind, we now know that counting inventory is a crucial part of stock management for any product- based business. In this article, we’ll outline five tips to help you conduct a successful stocktake.
Plan Ahead of Time
It’s always a good idea to plan a stocktake before conducting it. To reduce the level of interruptions to the process, you’ll want to make sure that everyone has the tools they need to get the job done. These may include clipboards, stock sheets, write-off sheets, pens, calculators, handheld scanners and mobile devices. Moreover, it is absolutely essential for you to choose a good date and time to conduct the stock check. You’ll have to pick a day when you’ll have all the resources you need. Since you don’t want any unnecessary distractions that could lead to miscalculated figures, consider either closing operations down for the day or conducting the stocktake after hours. Lastly, set aside time afterwards to resolve discrepancies.
For more information on how to plan a stocktake, visit the ATO website.
Organise Your Stock
To conduct a stocktake successfully, it is important that you organise your stock carefully. Separate stock that has been invoiced, but that is yet to be delivered or picked up by a customer. Then, start categorising your existing stock. Make sure stock held at different locations or on consignment basis is accounted for. Remember, that a clean and organised stockroom will make it easier for you and your staff to count the stock. Another measure that you could take would be to create distinct sections by labelling the shelves, along with using package labels that clearly identify what the package contains.
Organise and Supervise Your Staff
If you have employees that are assisting you with the stocktake, make sure that they are properly organised. After categorising your stock, appoint a separate staff member to each category and appoint more staff to larger categories. Then, give them clear guidance on the way you want them to count. This could include information regarding where to start, what direction to move through and whether you need them to count from top or bottom of the shelves.
You could even consider bringing in external staff for stocktaking to make it more efficient. However, it is important to note that involving your staff in stocktaking procedures will help them gain an understanding of the importance of stock management.
Count Absolutely Everything
Your goal should be to deliver as close to 100% accurate readings as possible. This means that you cannot afford to estimate or guess on any number. Remember to check stockrooms and other storage areas. Thus, make sure you check and double check stock numbers to avoid costly stocktaking errors.
Validate and Update Your Stock Records
After counting everything, check the physical stock count number against existing accounting records. Also, ensure that all items are accounted for and make a note of any discrepancies. Then, upon updating the inventory records in your accounting page, make a note of variances and follow up where necessary to identify the reasons for the variances.
Conducting a successful stocktake will prepare you for a new financial year, help you meet your tax obligations and assist you in gaining a valuable insight into your stock levels. The process can be challenging consequently, if you feel unsure and need advice with managing your inventory, contact one of our business lawyers.
Anupa is a Legal Intern at Lawpath, and is currently in her final year of studying Bachelor of Laws at Macquarie University.