The simple answer is that you need to do stocktakes to make sure that your business is operating profitably. Your stock (which can also be called your inventory) is basically anything that your business makes or buys to sell or trade, or changes into other products or goods for sale or trade. An annual stocktake is an essential part of inventory control and it’s the best way to keep track of your stock. Stocktaking involves physically counting all of your stock so you can find out exactly what you have, and its value. Once you’ve counted your inventory, you can compare it to your previous stocktake, which lets you see which of your products are selling, and which are not. A stocktake will also identify lost, stolen, or damaged items, which you may be able to write off as a loss. Stocktaking can help you to identify stock control issues and areas of your business that need to improve in order to be more profitable. In the day-to-day running of your business, you can easily lose track of which products are winners and which products you could probably do without. Nothing brings your finances into focus like a good stocktake – it’s a great opportunity to analyse your sales and profits and revise any pricing strategies that aren’t generating maximum profit for you.
As long as you are carrying stock you are never too small to conduct stocktakes. What you need to determine is the method and investment. If you are a smaller organisation then a simple paper based systems will only cost you time. The range in cost of automated systems can be anywhere from hundreds to thousands of dollars for a larger automated systems using barcode or RFID running on a wireless infrastructure. If time is money then investing in an automated system should give you a fast return on investment [ROI].
There are two parts to a stocktake – the physical counting, and the analysis. Yes, you could count your stock and record the counts on sheets of paper, and some businesses still do, but it can be stressful and very labour intensive, and until you enter the counts into a computer, you won’t be able to analyse it properly anyway. With paper stock count sheets, you need to go to each stock item, write the item code or description down on the sheet, then count the items and write that count onto the sheet. Then, you need to take the sheets back to a computer, and enter the item codes and counts into your accounting program (like MYOB or QuickBooks) or perhaps into a spreadsheet. Does that sound like much fun to you? The alternative is to use a barcode scanner. Most items now days have a barcode label on them already, but even if your products don’t, you can easily make your own labels with a computer, a laser printer, and pre-cut laser label sheets, and attach them to your products. There are two main types of barcode scanners – devices that connect directly to a PC (or notebook) via a cable or Bluetooth, and self-contained portable battery powered units with their own display and keypad. With the first type of barcode scanner, you scan the barcodes on your stock directly into your accounting program or spreadsheet, then type in the count. With the second type of barcode scanner, you take a small handheld device around with you, scanning barcodes and typing in quantities on the barcode scanner itself, then bring the barcode scanner back to your computer and download all the collected stocktake information into your accounting program or spreadsheet. With this type of barcode scanner, each person conducting the stocktake would have their own barcode scanners, which will allow the stocktake to be finished much sooner.
Your business records could be as simple as a paper notebook where you record each item you sell. Or, you could be using a spreadsheet that you’ve developed yourself, or a Quicken, Reckon, or MYOB small business accounting program, all the way up to a full ERP (Enterprise Resource Planning) system, or a WMS (Warehouse Management System). Whatever you’re using, you need a system of inventory control. And inventory control starts with a stocktake. As we’ve described above, the biggest time and effort saver when stocktaking is collecting the stock counts electronically, and this usually means using barcodes. Barcodes are most easily read with a barcode scanner, and these can scan barcodes directly into a computer, or a shelf, row, or even a whole warehouse of scans and counts can be collected and then brought back to a computer. If you are keeping your business records on a spreadsheet on a notebook or PC, a stocktaking system might consist of a barcode scanner that plugs directly into the computer, and allows you to scan the item barcodes directly into the spreadsheet, then type in the count on the notebook or PC’s keyboard. This system has the disadvantage that you need to bring the notebook or PC to the stock. A step up from this simple solution would be to use a portable barcode scanner, which you take to the stock, scan the item’s barcode, then count the items and enter the count into the portable barcode scanner. After you’ve finished the stocktake (or a section of it), you bring the portable barcode scanner back to your notebook or PC and download all the collected data into your spreadsheet. If you’re using a small business accounting system, the barcode scanning options are pretty similar to the previous paragraph, except that many of these accounting systems don’t provide an easy way to import stocktaking data into the accounting system. Usually, stocktaking with these systems will involve downloading the collected stocktaking data to a text file on the computer, then using the accounting program’s import functions to bring the data in. Or, sometimes the supplier of the barcode system will provide a custom program that directly downloads the stocktake data from the barcode scanner into the accounting system. Full blown ERP or WMS systems are usually similar to small business accounting systems as far as bringing the stocktake data from the barcode scanner into the system. Once the stocktaking data is in your accounting system, you will be able to generate reports and analyse the data. You’ll be able to see how many of each item you’ve sold, whether there’s anything missing (ie the difference between the stock count and how many items the computer thought you had), and lots of other useful information.
The First place to start is ASP Microcomputers! Talk to us about your requirements and we will be happy to discuss the options available that will meet your needs and your budget.
Before you start your stocktake, it is important to have a plan of action. Will you be counting all your stock at once? Will you be taking stock from your shelves to fulfil your customers’ requirements while the stocktake is in progress? It is also important to know at the onset what you will do with your data! If you are using an accounting or ERP system, you want to ensure that the data is available in the correct format and structure. Have a chat to our friendly staff at ASP Microcomputers and we’ll be happy to steer you in the right direction, so that your stocktake will be a cinch (and maybe even a little enjoyable!).
It’s not necessary that each item in your stock has a barcode! You may wish to only label shelf or bin locations with barcodes to identify the stock that is being stored there. Once the barcode is scanned, just count the number of individual items and register that count in the scanner.
Barcode labels can be printed in a number of different ways. Ranging from a simple barcode font that can be used in Windows programs like Word or Excel and printed on your desktop laser printer, to dedicated barcode printing software which allows for the use of different label formats and templates. Other considerations are the size and material of the label. If you are printing location labels then it may be worthwhile to engage a specialist as these labels need to be long lasting.
Check out our ‘Barcode Labels and Tags’ webpage for more information.
Ultimately, the purpose of a stock take is to ensure the quantities of items you have at hand match with your records and expectations. While there are some items which may not need to be included in a stocktake, it is always the option of staggering the count so you do not have to count all of your inventory in one go.
One stocktake as close as possible to the end of the financial year is a legal requirement for most organisations to determine the value of their stock for tax purposes. However there are other business reasons why you would conduct a stocktake more often such as identifying if stock is being stolen or damaged. Stocktakes can be done as frequently as daily where you would do a spot check on one item. Weekly stocktakes may involve an isle or set number of items. Organisations in the past needed to close down or do the stocktake after hours or on a weekend if they were only being done annually but nowadays more frequent stocktakes are the norm.