What is stocktaking, and why is it important?
Regular stocktaking involves counting every product that you sell. It is important for businesses that sell products to regularly count their inventory to prevent discrepancies and minimize losses.
It can help you avoid mistakes and losses and also organize products properly. Unfortunately, many businesses find inventory counts to be a hassle because they take so much time and effort.
Nevertheless, it's critical for any business that deals with products to stay on top of inventory in order to control it effectively.
Stocktaking is important because it allows you to:
1. Analyze the efficiency of your inventory tracking
2. Gain more visibility about your inventory performance
3. Recognize anomalies and resolve them before they escalate
4. Identify stock problems, including overstocking, stockouts, or deadstock
5. Calculate inventory turnover and other key metrics with reliable stock data
6. Adjust product prices to boost your sales
7. Determine the contingency stock level you need to maintain to meet emergencies or demand surges
With a well-structured stocktaking process and a robust inventory management system, you can make informed decisions related to inventory and improve your business performance.
Top 10 tips to maximize the effectiveness of your stocktaking process
Fix a date and time
1. Consider the approximate amount of time required to complete the stocktake. Allocate a convenient date and time to perform stocktake.
2. If you need to close down on the stocktaking day, inform your customers and vendors beforehand.
3. Ensure the designated slot doesn't cause any disruptions to your workflow or interrupt your customer service executives.
4. Executing stock-counting during a slow sales cycle or outside of business hours is advisable.
5. Find the best time and day for you and your team members to get the expected results.
Clean and organize your stockroom
1. Clean and organize your stockroom before starting to count your stock. This helps reduce the possibility of miscounting.
2. Properly define storage sections by labelling all the shelves where your stock is kept or should be stored.
3. Use appropriate package labels to identify what's inside the package.
4. Categorize each item based on your defined parameters, such as type of material, price, or expiry date, and label everything appropriately.
5. Keep aside dead stocks, damaged goods, and items nearing expiry to count them separately.
Use inventory scanners and stocktaking tools
1. Before commencing the stocktaking process, ensure your employees have the tools to complete the job.
For instance, it is essential to have stock sheets, clipboards, notepads, calculators, pens or pencils, handheld inventory scanners, mobile devices to access your inventory management app, etc., before you can start the process.
2. If you use portable data capture units such as handheld scanners for scanning and counting your stock, ensure the devices are fully charged and working fine before you start.
3. Perform a few test scans to ensure your software can scan your barcode format correctly.
Define your stock counting method
1. Create a guideline on how you want the stock counted and share it with your staff. Here are a few ideas to organize the counting part:
2. Divide all stocktakes into groups of two. This allows one person to inspect the stock and call out the quantity. At the same time, the other person can record the details and cross-check the information with your inventory management system.
3. If you have multiple groups of stocktakes, assign them to different warehouse sections so that the counting doesn't overlap.
4. Ask your stocktakes to follow the same direction while counting, from top to bottom, left to right. This avoids unwanted confusion and chaos.
5. Use a visual reminder to identify the stock that's been counted already. For instance, you can use coloured marker pens or tapes to label what's already been counted.
Don't engage in guesswork
1. Count everything in your stock, including packaged boxes, even if it will be cumbersome.
2. Never estimate or guess on any number since the ultimate aim of stocktaking is to gain close to 100% accurate readings.
3. Look for discrepancies between the counts on your stock sheet and the number of items you've counted. Record the differences found and push mislabeled/packaged boxes for quality control.
Value your stocks correctly
1. Ensure all items in your stock are valued correctly with the most up-to-date prices.
2. Match the price of your stock with the market clearing price or the best price your consumers are ready to pay for.
3. Adjust prices to reflect any depreciation. For instance, a raw material bought for $1000 last year may now be valued at only $750. Similarly, older products can be sold at a discounted rate for effective stock clearance and rotation.
Prepare your staff
1. Everyone in your stocktaking team should clearly know what they are expected to do.
2. Assign a supervisor who is responsible for overseeing the stocktaking process at all times.
3. Stocktaking supervisor should ensure that your team is completely focused on their task and not getting distracted. This way, you can guarantee that the counting process is accurate and error-free.
4. Stocktakers should be able to identify their groups, know the tools they will use, and understand where (which sections) they will count the stock.
Remember that stocktaking is lengthy and laborious, so ensure everyone gets sufficient breaks. Planned breaks will reduce mistakes and minimize the fatigue of stocktakes.
Evaluation after counting
1. Once you have thoroughly checked everything in your stock, including the value of your products, update your inventory software with the correct data.
2. Evaluate your stocktaking results carefully. Look for any discrepancies and note them down, even if it's minor. Make sure you solve the problem before updating the stock levels.
3. Rearrange items that are about to be stocked out or nearing expiry.
4. During your stocktaking process, you may find that certain items in your inventory are stolen, broken, or simply not selling. This allows you to find ways to handle such situations.
Digitize your inventory
If you've ever had to do a stocktake with pen and paper, you know how frustrating it can be. Not only is it time-consuming, but it's also easy to make mistakes like counting things twice or missing items altogether. That's why it's a great idea to switch to digital inventory management or warehouse management software.
Digitization of stocktaking helps prevent common mistakes like data duplication, errors in manual counting, overlooking of certain items, missing inventory, etc.
You make the whole process much easier and more accurate. Plus, you'll save yourself a lot of time and hassle!
Automated inventory software helps your stock takers say goodbye to exhaustive manual checklists and spreadsheets.
Read More: How small businesses can ensure efficient and reliable inventory management
Outsource stocktaking is an option
If you are short of time and labour to conduct regular stocktakes, consider hiring stocktaking services.
Professional stocktaking service providers help you switch quickly to digital stocktake solutions, so you can keep selling while the stocks are getting counted. You can also avoid closing your stores during stocktakes.
Professional stocktaking teams use cutting-edge equipment and innovative technology for better inventory visibility and faster reconciliation of stocks.
Stocktaking service providers specializing in stock control management and reporting help minimize inventory shrinkage, disruption, and fraud.
Improve your stocktaking process over time
When conducting a stocktake in your warehouse, it's important to keep in mind that the process may need to be adjusted based on the specific needs of your business.
The stocktaking process doesn't necessarily have to follow a list of static procedures. Your business needs may vary over time.
The tips shared above are general guidelines that you can follow when planning a stocktake in your warehouse.
If you're looking for top-quality flexible warehousing options in the UAE, consider reaching out to Cargoz. Our team of warehouse specialists can find you warehouses equipped with the latest technology and value-added services at a reasonable price too. Contact us today to learn more.