Do you really need to stocktake?
Our answer is a resounding ‘YES’.
You are probably completing either periodic or annual stocktakes no matter the size of your business. You may sometimes think is it all worth it!
What is stocktaking?
Stocktaking involves physically counting all of your stock within the business, then comparing the count data with your stock records to discover any discrepancies. The frequency of stock counts varies between businesses, with some preferring monthly or quarterly counts while some only complete stock counts once or twice a year. If you’re running a business that carries stock, you should do what feels right for you and the business, there is no right or wrong.
Discrepancies between your actual physical stock and your records allow you to pick up on a range of issues, putting stock control procedures in place will improve the overall stock management of the business. This will undoubtedly lead to increased profits down the line.
Why is stocktaking important?
As mentioned above, stocktaking highlights stock management and control issues, it also highlights areas of your business that require improvements in order to make it more profitable.
Is the business meeting targets?
Once discrepancies are checked and verified you may find that your business may not be on track with financial goals set out at the start of the year. It’s better to discover this sooner rather than later, put steps in place to improve the profitability and adjust the business forecasts while you can.
It’s far better to be in tune with the business finances throughout the trading year than experience a nasty surprise at the end of the financial year.
Are you maximising gross profit?
Stocktakes highlight the business finances, once discrepancies are verified take the opportunity to review profit and loss, revise any pricing strategies to maximize profit.
Do you have the right stock?
Conducting regular stocktakes will help focus the figures, in retail it’s sometimes easy to lose track of which products are selling hand over fist and which products are gathering dust. If you have large numbers of products that’s been on the shelves for months that is dead money, prices are often reduced to sell old stock through.
It’s the same in manufacturing, if your high usage material is not correct, production lines stop, then time, energy and resources are redirected to obtaining shortages in materials, often with businesses paying more because of short time scales. Every minute lost costs the bottom line. In manufacturing old stock can be reviewed for alternative purposes. If products can’t be reworked is it really worth stockpiling discontinued stock or should the stock be written off?
Do you have a theft problem?
The reality in any business is that theft will always play a part in your stocktake results causing discrepancies.
While discrepancies due to theft are unfortunate you’ll never be able to eradicate it completely. Stocktaking will highlight the opportunist or worse if you have a major issue on your hands. The size of the discrepancies will be the catalyst for a stock management and security review.
Even more regrettable is the fact that staff can be to blame for these thefts, regular stocktaking can discourage some employees from stealing.
Are you on top of stock shrinkage?
Theft is not the only loss of stock, regular stocktaking will also highlight problems with missing orders, damaged stock, and poor stock control procedures.
Use the information gathered during stocktaking to your advantage by making an action plan to address the issues highlighted . For example if stock was found to be damaged during the stock count ask yourself why?
- Could it be due to poor delivery?
- Could it be poor stock controls within the warehouse?
- Could it be down to the storage location on the shop floor?
Are you ready to improve your stock ordering?
Stocktaking will highlight shortages you weren’t aware of and will prompt an order. Believe us there are things that even good inventory software can’t always pick up on. For example, the system may have on record that you have high quantities of fast moving stock in the warehouse, whereas the physical count indicates low levels of stock. This discrepancy could be due to a large quantities of stock either missing or damaged in transit, stolen or actually delivered as the wrong product.
Now ask yourself do I really need to stocktake?
So if you’re looking for a stocktaking company with the answers, Book your free consultation today click or call 0871 662 9149.