It's the one task that most managers will tell you they dread, but while time consuming, it's one of the single most important processes of a business with any kind of inventory involved; Stocktake.

In theory, stocktake is simple. Physically count all of the individual items you have left in stock and compare the numbers to your records, find out the variance and paint a clearer picture of stock that has been stolen, misplaced or spoiled - or even simply isn't selling well. But when your stock levels are in the thousands and or you have multiple stores you're sending stock to and from, this can be a lot easier said than done.

That's why we've put together a few quick tips on how to make this notoriously painful process as seamless and accurate as possible, so you can get back to running your business faster with a clearer idea of the inventory you have in store.

Before the Big Day

Before you dive into the storeroom and make a start, there are a few things to consider and plan in advance to ensure everything runs smoothly for you and your staff.

  • Choose your timing wisely.

Stocktaking can be an incredibly time consuming job and because you're going to need human resourcing to get the job done, a little fore-planning is key. Ideally you'll want to run your stocktake outside of retail hours so you staff can be focused on the job at hand and you don't miss out on any sales. If this isn't possible, you may need to plan your stocktake during a particularly slow sales cycle, or alternatively shut-up shop altogether.

  • Pick the right people for the job

While the task itself seems quite simple, there's a lot of room for human error. As people become tired or overworked, they're more likely to miss things here and there - and the whole point of stocktaking is accuracy.

When selecting your team for stocktake, we recommend selecting in pairs. Ideally you'll have one person who is familiar with your stock room and business processes who can use your system well and one person who's newer and can act as a fresh pair of eyes, in each pair. This way, you'll be double checking everything you're doing as you go and reducing the likelihood that things will get missed.

  • Get the tools you need prepared

Finally, when it comes to stocktake preparation, it's important to have all the tools for the job ready to go.

If you're doing the process manually and on paper, we'd recommend clipboards, stock sheets, write-off sheets, pens and calculators for each pair of stocktakers.

Of course there are some really innovative ways to stocktake that require a lot less manual effort. For example, you can use stocktaking spreadsheets that are created with specific formulas to do the math for you as you go. We've created a stocktake template for this which you can download below so you can digitise your own stocktaking process.

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If you're willing to invest in streamlining your stocktakes or are a larger business with a significant amount of stock, there are some great technological solutions available that cut down the time stocktaking takes significantly. For example, RFID technology (Radio Frequency Identification) allows you to place chips in the packaging of your stock, which you can then track in real time.

During the Stocktake

  • Never trust a label

Albeit tempting, when conducting a stocktake never trust a label or guesstimate what the contents of any box are. Just because the packaging says '20 pens' doesn't meant there are in fact '20 pens inside'. There might be 19, or even worse, someone may have swapped the pens out for pencils. Open every single box, count it and record it - then proceed to the next box.

  • Map it out and mark it

Stocktaking should be a methodical and planned out procedure. While you might want to get the show on the road quickly, we don't recommend sending your staff into the storeroom counting without a plan in place. Map out the shelving, assign your pairs of counters to each individual shelf and ask them to mark each individual box as they go to avoid double counting. Once a shelf has been counted, communicate this to the wider stocktaking team. Trust us - a little planning will reduce confusion later.

  • Maintain auditable records as you stocktake

Not only should you be recording the numbers while you stocktake, make sure you keep records as you go of who is counting which section of the store and where things are located, so that in the future when your stocktake is audited, you'll be able to identify if and where things went awry. It's also a good idea to take note of what things go wrong as you stocktake, so you can better plan and improve your processes next time.

  • Only use up-to-date data

Particularly if you're working in retail, you may find that you have items that have been invoiced to customers but not yet shipped, or even items held on lay-buy or returned due to a fault.

It's important that as you go, you're on top of which items are actually a part of your stocktake to be counted, and which have been already accounted for in your up-to-date system inventory. If you're not on top of this, you're going to stumble across discrepancies.

After the Stocktake

  • Double-check your audit and validate your stocktake

Once you've completed your stocktake, you'll need to go through your new records and compare them with your systems inventory list and expected results. Make a note of any clear inconsistencies, outlined damaged items and mark anything you need to investigate further. It's also a good time to double-check that your stock is valued correctly, so you can ensure that your numbers of variance and loss are correct.

  • Address any discrepancies

For the most part, stocktake discrepancies can be put down to human error, bad math or mislabelled products. It's important at this stage to look at your highlighted inconsistencies from your stocktake validation and address them directly.

On the other side, sometimes discrepancies (or shrinkage) are cause by employee theft, shoplifting or supplier fraud. If you suspect that this is the case, we'd suggest interviewing staff and suppliers, looking over security footage and double checking that there hasn't been an administrative issue.

They key here is to get to the root cause of the issue and address it. Shrinkage is to some extent unavoidable, but with the right level of investigation and insight, you should be able to reduce its impact in future.

  • Draw reports and insights on improving the bottom line

From your new data and insights, you'll begin to paint a better picture of how your stock is moving from supplier to customer. Perhaps you've noticed that certain stock simply isn't selling, or that the cause of shrinkage is primarily shoplifting, or even that your stocktaking process was particularly painful and could use some measures in place throughout the year to make it a bit easier.

From here, you can begin brainstorming ways that you and your team can address these problems on an operational level. Perhaps it's upping your security measures, a more regular stocktake audit, or investing in upgrading your inventory.

Usually, the sure-fire way to reduce shrinkage and positively impact your bottom line is to create a plan to optimise the amount of product stored in your warerhouse and adjust your orders accordingly.

  • Update your data

Your final stocktake action is to update your current inventory list with the numbers from your latest count. Ideally, you'll have entered the data into a CSV spreadsheet and the input of data will be a straightforward process. This way, when it comes to your next stocktake you'll have all of the up-to-date numbers on hand.

About to do a stocktake of your own?

We know how time consuming it is to record all of your numbers on paper, and do the math by calculator afterwards. That's why we've put together a stocktake template that you can open as a spreadsheet file, and input your data directly into. The formulas are all ready to go, so once you've spent some time setting it up for your business, all you need to do is input your count! Download the Stocktaking Template FREE below.

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