Tips for the Coming Stocktake

A stocktake is one of the most important disciplines in retail. It shows whether your inventory records match what is actually on your shelves, in the back room, and in storage. It can be a big job, but it remains one of the best ways to control stock, test your inventory system, and uncover problems that are costing you money. I have spent a lot of time around stocktakes over the years, and I've seen firsthand how the more organised the business is before the count, the faster and more accurate the stocktake will be.

Why stocktaking matters

Good inventory management matters because bad stock figures hurt businesses. It is also, for most Australian businesses, a strict ATO requirement. 

A good stocktake helps you:

• Find excess stock and dead stock.
• Improve the accuracy of your inventory records.
• Examine your stock.
• Support your stock values for accounting and tax purposes.

Before you start

A successful stocktake begins before stocktake day.

Look for every place where stock is held in your business. Do not just think about shelves. Include drawers, counters, office shelves, back rooms, warehouses, promotional displays, window displays, bargain bins, and any odd storage spots. We find that these forgotten areas often cause the most stocktake errors.

Now, start to tidy the stock. The tidier it is, the easier it will be to count:

• Move stock to the correct area.
• Straighten mixed and messy sections.
• Separate similar-looking items with different barcodes.
• Pull out damaged, unsaleable, or returned stock.
• Put laybys, consignment stock, customer orders, and goods waiting for dispatch into clearly marked holding areas.

Now divide the business into counting sections. Each section should be clearly defined and, as a rule, take 1-2 hours. This makes it easier to keep organised and focused.

Pick a quiet time if possible.

Select your people for the stocktake, make sure they know their role and what they need to do. We have prepared a video to help them here:

First, organise your people. Counting usually works best in teams; two people counting and one person recording is often an effective combination.

Before anyone starts, hold a short staff briefing so everyone understands:

• How the count will be done.
• The counting order to follow.
• How to handle problem stock.
• Be clear about how units are handled. Everyone must know they are counting singles. If a carton is open, tell them to check it properly and not to assume it is full.
• Who is available during the stocktake if there are questions? If each team handles problems differently, your stocktake will quickly become inconsistent.
• Set up a designated problem area. Rather than holding the count up, put problem stock in that area and move on.

Check your equipment

Before the day, test your technology. There is nothing worse than getting everyone ready only to find out something does not work:

• Test your stocktaking software.
• Check scanners, laptops, and PDTs.
• Charge batteries.
• Have chargers ready.
• Make sure everything connects properly to your POS software.

If you can use laptops or PDTs, do it. They save time because staff can move with them around the shop.

Also have the basics ready:

• Pens.
• Clipboards.
• Labels.
• Tape.
• Markers.
• Spare batteries.

Start counting

When the count starts, use one method and stick to it.

I recommend a simple system of counting from left to right and bottom to top. If you want something different, make sure everyone follows the same rule.

Then work through the stocktake in order:

• Count one section completely before moving on.
• Mark finished sections clearly.
• Use place markers to clearly mark counted areas.
• Keep teams in their allocated areas.

It also helps to start with the hardest or messiest sections first, while everyone is fresh.

Count every location where the same item is kept. It is easy to count the shelf and forget the backup stock in a drawer, cupboard, or storeroom.

Handling problem stock as you go

Keep the process moving.

If a team finds a product with a missing barcode, a damaged label, or another issue, do not let it stop the count. Put it into a problem holding area and keep going.

As you count:

• Spot-check completed sections.
• Recount anything that looks wrong.
• Keep unnecessary staff away from the counted areas.
• Keep customers out of completed sections where possible.
• Clearly note where estimates were used.

Some stock always needs extra care:

• Greeting cards in packed pockets.
• Books displayed in multiple places.
• Magazines on shelves, in pockets, and in return areas.
• Gift lines with display stock out front and backup stock in storage.
• Stationery items that look the same but differ in colour, size, or barcode.

Before you finish

Do one final sweep before you sign off.

Walk the whole business and check every area on your stocktake map. Make sure each section has been counted and marked off. This final check often picks up forgotten displays, cupboards, drawers, and odd corners.

A stocktake can take more than one day, and that is fine. What matters is that it is done carefully, consistently, and completely.

Conclusion

A good stocktake is all about preparation, clear rules, and a disciplined counting process. Do that well, and you will end up with better stock figures, better buying information, and fewer surprises.

If I missed something, please let me know.

Happy stocktaking!

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.