Completing regular stock takes is an important part of running a business. It helps to make sure you have enough stock to meet demand and it a
lso gives you insight into what is selling and which products are not.
Before starting your stocktake, walk through your store and inventory to check that everything is labelled and in the correct place. This will reduce the chance of missing items during the count.
It’s a good practice
Stocktakes are a good practice for Australian small business owners because they allow you to accurately track the goods and services you have in your possession. They also help you to avoid overstocking items that don’t sell.
Stock takes can be a time-consuming process but are well worth the effort if you’re serious about running your business profitably. They should be carried out as close to the end of your financial year as possible and it’s recommended to do them outside of business hours, especially if your inventory is held at your premises.
Stocktakes are a good way to identify damaged, expired or missing products. They can also reveal if there’s a problem with your inventory system that needs fixing. They’re also a good opportunity to review your ordering and tracking procedures.
It’s a legal requirement
Depending on your business size, you might be legally obligated to conduct a stocktake. This is especially true for Australian small business owners who are subject to the simplified trading stock rules.
Under these rules, you can determine if you need to do a stocktake by using an estimate of the value of your stock at the beginning and end of the income year. If the difference in stock value between these dates is less than $5,000, you won’t need to do a formal stocktake.
If you are planning to do a stocktake, it’s important to make sure that all staff have full understanding of the process and how to conduct a proper count. This should include identifying and separating slow moving, damaged or obsolete items from normal stock, as these can be valued at a later date.
It’s a good business practice
A stocktake is a physical count of all your trading stock and should be completed as close to the end of the financial year as possible. This gives you the opportunity to recheck your count against accounting records, note any variances and follow up on any discrepancies.
It’s important to count every item on your shelves, whether it’s a pallet, case or box of stock. This includes products that have been returned by manufacturers or stored in hold cupboards, items sold on lay-by and any product that’s been in storage for more than a few weeks.
A well-planned stocktake should result in minimal disruption and deliver accurate data for the maintenance of your inventory records. It’s also an opportunity to identify any recurrent stock issues such as slow moving items or a possible problem with theft or misappropriation.
It’s a good financial practice
A stocktake is a physical count of your current inventory to give you an accurate reflection of what items are on hand. This can help you identify missing or lost items, check if your business is meeting sales targets and improve your processes of ordering and handling stock.
It can also reveal stock items that weren’t entered into the system correctly when you received them, or products you haven’t been selling well – all of which can have an impact on your cash flow.
Getting rid of excess stock can be a great way to cut your expenses, but be careful. It’s important to have inventory management practices in place throughout the year to prevent donating stock you’ll never be able to sell or perishable goods that won’t last much longer than the end of the financial year.
How to Complete an Easy Stocktake
Make sure you have a system in place before you conduct your stocktake. This will ensure that you get an accurate result every time, and it will help you limit the amount of distractions and errors that occur during the process.
Categorise your stock into categories based on where they're stored, and assign a group of people to each category. Don't just appoint a single person to do the whole count, as they might overlook small details that could affect the results.
Create a map of your store to aid in the counting process. This will give you an at-a-glance overview of your entire stockroom, and it'll also make it easier to divide up responsibilities between different staff members.
Label each storage area so that it's clear which part of the store contains which type of item. Without labels, employees will often stock things in the wrong places, which can lead to wasted time searching for them.
It's also a good idea to include a safety stock, or buffer stock, in your inventory as an extra precaution in case you suddenly find yourself short of an important item. Having this on hand can help you fulfill orders quickly, and avoid the potential for backorders.
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