Stock-taking is a valuable process for every company selling a product/s.
If not performed on a regular and consistent basis, it is bound to cause serious problems down the line.
For example, when the stock-count on the system differs from the actual stock on the floor, wrong orders may be placed.
The stock also adds to the overall value of the business, which is determined through a detailed stock-take.
Some of the main reasons why stock-taking is important:
- To Get Financial Clarity
- To Separate Old Stock From New Stock
- To Streamline The Order Process
- To Remove Dead Stock
- To Write Off Stolen And Broken Products
For new or established businesses without a proper stock-take system in place, the above-mentioned reasons should be motivation enough to rectify this problem.
However, just to reiterate why stock-taking is so important, the reasons are explained in more detail below.
To Get Financial Clarity
All the stock on the shelves and in the warehouse form part of what the business is ultimately worth.
However, the specific numbers can change over time thanks to software and human error.
This is why a detailed stock-take is arranged on a regular basis, in order to bring those numbers back into line with reality.
It is also recommended to implement small and daily stock-take cycles, seeing as it will help the big stock-take to be more accurate.
It’s important to remember the point of stock-taking is to clarify how much the stock adds to the financial strength of the business.
This is something business owners should take seriously in order to maintain the business on a profitable level.
To Separate Old from New Stock
While stock rotation is a basic fundamental for retail business, it does not always happen the way it is supposed to.
As mentioned earlier, software and human error can cause the old stock to be left behind while new stock keeps moving onto the shelves.
Luckily, a detailed stock-take will reveal this issue, seeing as the premises is searched high and low for the products.
If done on a regular basis, older stock can still be moved without the risk of going past expiry dates.
If the problem is picked up too late, the old stock may need to be written off as waste.
To Streamline the Order Process
The managers or employees responsible for ordering stock cannot be expected to count every product before placing the order.
This is even more so when there is special software to tell them how much stock is on hand and how much they are selling at a given time.
However, when the receiving section of the business makes a mistake or products do not scan like they are supposed to at the point of sale, this means the software has some problems.
This results in wrong orders getting placed and money being wasted.
To Remove Dead Stock
A detailed stock-take with proper planning and execution will quickly reveal dead stock sitting in the warehouse.
Therefore, hopefully, something can be done with the dead stock, such as putting the items on sale.
To Monitor Loss
Unfortunately, issues like theft and breakages will always be part of running a business.
And by performing regular stock-takes, these issues can be monitored before they get out of hand.
At the end of the day, there are many reasons why stock-taking should be a fundamental part of most businesses.
Overall, it improves the way the business functions on many different levels.
From ordering stock to monitoring and separating old from new, the process is not be underestimated.
It is also important to use accurate equipment and measures for ensuring the success of the stock-take.
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We are the market leader when it comes to the development of customised and packaged solutions.
This includes Inventory Management, Portable Barcode Readers, Supply Chain Management, Time and Attendance and Asset Tracking to name but a few.