The stocktaking process refers to the processes and procedures that are being used when new stock arrives to your business. Performing a complete stocktake a few times a year is essential for maintaining optimal inventory levels and minimizing losses in your retail or wholesale business. Yes, it can be time-consuming, frustrating and a pain in the butt, however, it needs to be done.
The last thing you want is errors, whether that’s over counting or undercounting, it can cost you money and it can cost you customers.
You need a stocktaking process that’s efficient, accurate and fast. It’s a key pillar to efficient retail inventory management.
Having the right stocktaking process structure in place is important so employees and managers can follow your plan together.
A well-structured stocktaking process will include all the steps required to keep your staff working efficiently to uncover discrepancies and inaccuracies while keeping them engaged and focused.
Let’s take a look at ten key steps that will maximum your effectiveness for stocktaking.
(1) Schedule Stocktakes At The Right Time
You need to make sure you’re scheduling your stocktakes at the right time for your business. If your stocktake is a lengthly process, you may want to consider doing it a slow sales cycle or outside of your normal business operations. Every industry is different, that could mean the summer for you, it could mean the winter for others. Find the right time.
(2) Have Your Stocktaking Tools Organized
Prior to starting your stocktaking process, everyone needs the right tools to get the job done right.
Here’s some of the most common tools for stocktaking.
- Write-Off Sheets
- Stock Sheets
- Handheld Scanners
- Mobile Devices
(3) Clean and Organize Your Stockroom Before Performing Your Stocktake
While this is an obvious one, how many of you know you have dirty, unorganized stockrooms right this minute?
A clean and well-organized stockroom will make it easy to find and count your stock to reduce the possibility of miscounting.
Another measure you could take to make the stocktaking process more efficient would be to create well-defined sections by labeling the shelves that stock is and should be stored on, along with using package labels that clearly identify what’s inside the package.
(4) Always Count Everything (Open That Box!)
You should never just assume an item is in the box. It doesn’t matter what that box says, open it and count it! Mistakes and errors happen, small mistakes add up over time. Plus, if you’re not responsible for missing items, why would you take fall?
Open every box and count all of the contents inside, make sure that amount is accurate.
The focus of your stocktaking process should be to get to 100% accurate readings as possible, so never assume or never guess. Always make sure you’re recording discrepancies on your stock sheet as items are counted. You should also record mislabeled/packaged boxes for quality control.
(5) Only Use Up-To-Date Inventory Data
The priority goal of a complete stocktake is to get an accurate count of the inventory you have and compare it to the existing inventory data you have.
You do want to make sure you’re excluding raw materials not in your inventory system, as well as invoiced orders that haven’t been shipped yet. Processing materials that haven’t been added into your inventory management system is a separate task that doesn’t need to be done during a stocktake.
(6) Define The Goals and Responsibilities
Most stocktaking processes will be overseen by a supervisor. Your supervisor should have a list of what needs to be counted and what should be in their warehouse so they can double check work done by your stocktakers.
Supervisors should make sure there’s no distractions. Employees shouldn’t have mobile phones out, it’s obvious we know but it happens.
Your stocktakers should know what groups they belong to, how they will be counting stock and what tools they need to get the job done.
If stocktake is going to last a long duration of time, make sure you give the team adequate breaks. You may also want to consider working stocktake in the mornings as most people do their best work early.
(7) Value Your Stock Correctly
Once all of your stock has been counted, make sure you have the most up-to-date prices for all of it. The price of your stock should match the market clearing price or the price that consumers are willing to pay for that item. Now, don’t forget to include depreciations.
For example, if you purchased a certain raw material last year for $3,000 but now it is only valued at $2,250 then you need to change prices to reflect the lower price, the same goes for older products you’re now selling at a discount.
(8) Know What Stock You’re Counting and How You’re Counting it
It doesn’t matter how big your warehouse is or what inventory you’ll be counting, you need to let your stocktakers know what sections they’ll be counting and in what order. Once you know that, you can give them a clear system to follow.
Here’s an idea for how to organize the actual counting part of the process:
- Each unit will be in 2 groups, one group inspects stock and the amount, the 2nd group would record and double check.
- Make sure sections don’t overlap, each stocktaker should have a dedicated area.
- Make sure stocktakers are counting the same way, this could be right to left, left to right, bottom to top, top to bottom.
- Mark stock that has been counted with a highlighter so you clearly know visually what’s been counted for.
(9) Slow-Selling Inventory, Damaged Items And Holding Costs
Anytime you do stocktaking, you may find items you thought were in your warehouse are actually missing. You could also find some items that have been damaged or spoiled, but never reported.
You also may find that there’s a few items that are not selling well, perhaps not selling at all. Inventory hold costs can quickly add up.
With these types of insights, you can begin thinking about how you can make your warehouse more secure. This may be a good time to implement additional procedures so you can avoid missing or damaged items in the future.
We’re all aiming for efficient inventory management, so creating a plan of attack for optimizing the inventory in your warehouse is essential.
(10) Always Improve Your Stocktaking Process
It can take time to get your stocktaking process dialed in. Remember, when errors are made, it gives you the opportunity to improve the processes.
If you’re struggling to keep up with sales and inventory, you need to check out our POS reporting software. It’s going to allow you to make quicker and better informed decisions.
We get it, inventory control over multiple locations can be a challenge. This is why you need the right tools to the job.
If you want to see first hand how our POS analytics are helping retailers, schedule a demo here. If you don’t take action, you’re never going to see the results you could see when you have the right data in hand to make key business decisions that are going to allow your company to thrive.