A stocktake is a count of the business inventory on hand, typically done at the end of the financial year, though some businesses may do it more regularly.
Having an accurate idea of the number of stock items your business owns allows your accountant to reconcile physical stock to the inventory records, highlight variances, and identify issues with stock management and control.
With accurate knowledge about stock movements and stock on hand, you can make informed decisions about theft, slow-moving items, damaged stock, technology obsolescence 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 where it is
Separate stock that’s been invoiced to a customer, but is still in the warehouse. Likewise, stock received but not yet recorded in the books should be distinguished.
Make sure stock held at different locations or on consignment basis is accounted for.
2. Make sure the stock room is clean and tidy and inventory items are clearly laid out
Attach labels to shelves to clearly identify different stock; eg categorise inventory and label inventory not to be counted etc.
If relevant, give stock counters 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.
3. Tools for the stocktake
- Stock sheets Don’t include the current number of inventory on hand. If inventory is barcoded, make sure barcodes are written down clearly.
- Write-off sheets Make sure you check the condition of the inventory as you count.
- Pens Use different colours. The audit trail can be easily followed if the first counter uses a blue pen, second counter uses a red pen, and the sheets are submitted to the stocktake coordinator who uses a purple pen.
- Hand held scanners For bar-coded inventory.
4. Discourage radios, mobile phones, iPods and idle chit chat
While it might seem mean, distractions can easily lead to errors.
5. Count every item of your inventory. Don’t estimate!
It might seem tedious, especially if you think you have a good idea of quantities, but it’s much better to get a 100 percent accurate record the first time. Don’t forget to open boxes – just because the carton says there are 24 items in the box doesn’t mean there actually are.
6. Check the physical count against accounting records. Recheck discrepancies
Make a note about variances and follow up where necessary.
7. Update your records
Once the stock take has been finalised, update the inventory records in your accounting package.
A well planned stocktake will result in minimal disruption, accurate inventory records and provides a basis for making informed business decisions.
Find out more about MYOB AccountRight’s inventory management functionality.
It’s so advanced, you’ll always be able to track what you buy and sell.