How (and Why) to Do a Stocktake

The importance of a stock take

Stocktaking is nobody’s favourite part of running a store — but it is a very important part, especially if you start branching out into ecommerce, or you’re selling food items. You may think that it isn’t necessary if you have an inventory management system, but trust us, it is!  

Once you’re into the swing of it, you’ll hopefully find it a not too painful process, either. Dare we say it could even be an enjoyable one? Okay, okay maybe that’s a step too far. Nevertheless, let’s take a look at how to do a stocktake as quickly and effectively as possible. 

Why are stocktakes important?

But first, let’s look at why you should do a stocktake. Even if you use a digital inventory management system, physical stocktakes are important because they can help you…

  1. Flag issues with your stock management system. Digital systems aren’t perfect, and neither are the people using them! 
  2. Identify theft problems. Notice a big discrepancy in the number of valuable items, or ones by the door? It could be that you have a shoplifting problem.
  3. Locate supply issues. Are you receiving less of an item than you thought? Is a high percentage damaged on its way to you? A physical stocktake will bring these issues to light. 
  4. Spot cases of overstocking or stock outs. Again, an inventory management system can theoretically help with this. But perhaps there’s a box you forgot to log? Or perhaps just actually seeing the items in front of you is more useful than looking at a number on a screen.

How to do a stocktake 

So that’s why you should do a stocktake… but where to start? Here’s our seven step process for a seamless stocktake:

  1. Find the right time and cut off sales
  2. Print stock sheets from your POS 
  3. Divide your store effectively
  4. Don’t guess 
  5. Keep up morale 
  6. Input the correct figures 
  7. Analyse the results

1. Find the right time

A stocktake should take place outside of store opening hours. That’s because you need to be able to definitively cut off sales while you’re carrying out the stocktake — selling items in the middle will mess up your numbers, and be a huge distraction. 

It can be hard to figure out how long you need for a stocktake, but it’s important to try to set expectations for any staff helping you out (or willing partners, or friends!). You can get a rough estimate by doing a corner of the shop yourself as a trial run first. If you can do about an eighth of the shop in an hour, you know it’s an eight hour task in total, or four hours between two.

But don’t forget to factor in breaks! That’s something we’ll get into in step five. 

2. Print stock sheets directly from your POS

If you have a properly-configured electronic POS system, you can generate a list of all the products you have in your store, including different variants. The POS system will also show you how much of each item it believes you have in stock. 

Top tip! Got products that have been paid for, but not delivered or collected yet? Be sure to keep these out the way, and don’t include them in your stocktake or you’ll mess up your numbers.

If you don’t yet have a POS system but want one, timing this with a stock take is ideal. You’ll have an exact breakdown of all the products in your store, just ready to upload onto your new system. 

But for now, you’ll have to take a manual record. Remember to break each product out by variant, i.e. instead of ‘12 tshirts’, you need ‘2 red tshirts, size medium’ etc. 

3. Divide your store effectively

It’s so important to be really clear from the start about who is doing what. Fail to prepare, and you could end up wasting time by double counting items — or worse, reporting incorrect figures! 

You’re best placed to decide how this looks for your store. Our advice is just to take your time here to avoid wasted time down the line.  

4. Don’t guess 

This sounds like a really obvious point, but it’s so important not to guesstimate when doing a stocktake. 

For example, if you see you’re meant to have 12 of a certain mug in stock, it can be tempting to have a quick glance at the shelf and think ‘that looks about right’. But it’s essential that you take the time to count them all one by one. 

If you have an electronic POS system, you can actually use the barcode scanner to scan each item individually, and the system will count them automatically. This removes any temptation to guess, and will also stop you from losing count at any point. 

5. Keep morale up 

It’s important to keep energised and alert while carrying out a stocktake, so be sure to factor in regular breaks. If you’re working with a team, it’s also a nice idea to provide some coffees or snacks to keep the energy up. 

Top tip! Not got anyone to help with your stocktake? Make it more manageable by trying an alternative called cycle counting. For most people, this looks like ‘little and often’ stocktakes of different products/parts of the store, rather than doing it all in one hit. Others take this a step further by prioritising top products, or even just testing a sample of products rather than your full inventory (although we wouldn’t recommend this until you’ve done a few full ones). 

6. Input the new figures 

Before you reopen sales, it’s vital you input the up-to-date stock figures into your POS system — otherwise, all your hard work has been for nothing! 

Unless you’ve been scanning items individually, this is unfortunately a case of going through and adding these in manually.

7. Analyse the results

You’ll be pleased to know that this isn’t something you need to do on the same day as actually completing your stocktake! But try to carve out some time over the following days to analyse the results. Where there were unexpected differences between the POS numbers and your own, you may need to think about having a reshuffle of stock, providing more training to staff, or getting in touch with your supplier, depending on the issue.

How often to do a stock take

You should now feel confident in carrying out a relatively pain-free stocktake. The only question that remains is: how often should you do one? 

Again, the answer depends a lot on the type of store you have, and your confidence in your current systems. 

  • A store stocking perishable items may need to carry out stocktakes every month, or even more 
  • A new store may want to do a stocktake after the first few months, because it’s working with new systems and new staff
  • A more established store may be happy to do a stocktake around once a year, because it’s confident in its systems and processes, and has found the inventory data to be pretty accurate for the last few years

Wrapping up 

When it comes to managing inventory, there’s plenty of great technology out there to support you. That said, we still see plenty of value in a traditional, physical stocktake, and the steps above will help make sure it’s worth your while. 

Have you ever uncovered anything surprising while carrying out a stocktake? Got any top tips we can include in the steps above? Drop us a comment below!

Tags: how often to do a stock take, how to do a stock take, what is the importance of a stock take

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Hannah is Creoate's Content Marketing Manager. She's passionate about bringing you content that's actually useful and — dare she say it —inspirational. Running a small business is hard, and we really want to help with that. Drop her an email at [email protected] if there's anything you'd like to read (or if you'd like to be featured!). She's all ears.
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