Inventory and stock
What is stock taking? Meaning, process and checklist
Definition
Stock take: A stock take is a physical count of the goods you hold, compared with your records so that missing, damaged or extra stock is found and corrected.
Also called: stock taking, physical stock count, physical verification of inventory, cycle count, stock audit
What a stock take is
A stock take, also called stock taking or physical verification, means counting what is actually on your shelves and comparing it with what your records say. Differences come from billing mistakes, receipts entered wrongly, damage nobody recorded, theft and goods sold in the wrong pack size.
There are two common ways to do it. A full stock take counts everything at once, often at the financial year end on 31 March, and usually means pausing sales and receipts for a day. A cycle count covers a few shelves or product groups each week, so every product is counted several times a year without closing. Many small businesses do both.
How to do a stock take
A count is only as good as its method. Agree these steps with your team before you start.
- Choose a quiet time and stop receipts and dispatches in the area being counted.
- Count shelf by shelf, so nothing is counted twice or missed.
- Count each batch separately when products have expiry dates.
- Count in the same unit as your records, such as pieces rather than cartons.
- Work in pairs: one person counts, the other records.
- Recount any big difference before accepting it.
- Record every correction with a note of the likely reason.
Common stock-take mistakes
Counting while billing continues changes the numbers under you. Skipping empty shelf spaces means products your records show but the shelf does not are never corrected to zero. And correcting the records without asking why the difference arose lets the same loss happen again next month. Decide beforehand who approves corrections, so nobody quietly changes a count to match the records.
Worked example
A cycle count at a garment store
A garment store counts its men's shirts on a Monday morning before opening. The records show 1,250 pieces across 40 styles; the count finds 1,226. The 24 missing pieces have an average cost of ₹180, a loss of ₹4,320, or about 1.9% of the category. Most of the gap is in two styles kept near the entrance, so the owner moves them behind the counter and counts them again the next week.
In managemate
In managemate, choose Count by scanning, pick the location and scan each item, or type the counted quantities. Before you save, the screen shows how each count differs from your records. Only the products you counted are corrected, so you can count one shelf at a time, a count in progress can be kept for later on the same device, and a product can be counted to zero. When a product holds several lots at that location, missing units come off the earliest expiry first and extra units go into an undated lot, so use Count this lot on each lot in Inventory when expiry dates matter. Every correction appears in the stock ledger as a stock count, with who made it.
Where this shows up in managemate
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