Is Stocktaking important?
Is Stocktaking necessary?
Do I need a Stocktake at all?
Should I put it off for later?
If you’ve been thinking like this lately, then you’ve come to the right place
To answer the first question, stocktaking isn’t important for your business, it is essential for it. Stocktaking is an important business practice and the sooner you realize this, the better it will be for you. Stocktaking is crucial for your business and we will outline everything that proves it. So, without further ado, let’s get down to business.
What is Stocktaking?
You’ve probably heard the term stocktaking a lot, but do you know what it means? if you don’t, then no need to sweat because we’re going to reveal it here. The practice of accounting for stock, stocktaking physically counts stock and then compares it with stock records to unearth any discrepancies. The threat of pilferage and the vulnerability of the both the stock in transit and the stock at rest, has forced many retailers to adopt this practice. Without stocktaking, there is always a threat of incurring severe losses due to pilferage or vulnerable stock.
By measuring the stock in outlets, stocktaking ensures transparency and accountability. With regular stocktakes, you can know how stock has been lost, where it has been lost and who is to be held accountable for it. A widely adopted practice, stocktaking is helping businesses worldwide to manage and optimize their stock, which in turn allows them to remain profitable.
Now, a question that businesses often ask is how often should they perform stocktaking. This is a tricky question to answer as the frequency of stocktaking depends on the type and size of your business, but a good rule of the thumb is to perform the stocktake once a month. However, if you think your business needs more attention then a higher frequency is advisable.
Why is Stocktaking Important for Your Business?
Ah, the million-dollar question! The reasons for performing stocktaking varies from business to business, but all businesses agree to the fact that stocktaking is an essential part of running a business—especially if that business happens to own inventory. There are several different types of stocktaking but the most commonly performed stocktakes include retail stocktaking and food & beverage stocktaking. Businesses perform stocktaking for many different reasons and following are some of them.
No matter how hard you try to avoid it, theft will always affect your stock count and result in discrepancies. And, nine out of ten times your staff are involved in it, which makes matters even worse. However, there is some light at the end of the tunnel. While stocktaking won’t eliminate future instances of theft, it will help you find discrepancies in stock, highlighting a major issue that needs your immediate and unforgiving attention.
By providing you with hidden and invaluable information, Stocktaking will motivate you to review your security and fix your problem areas to discourage potential thieves and eliminate or minimize instances of theft in the future.
Identify Stock Shrinkage Problems
If you thought that theft was the only thing causing loss of stock, then think again. A stocktake will reveal several other problems with your stock including poor stock control practices, unprocessed or missing orders and damaged stock. The good news is that you can use this information to improve the areas of your business causing the above problems. And, this can only be good for business.
Achieve Business Targets
If you find any discrepancies in your stock numbers, then this could be an indication that you are not achieving your business targets. If stocktaking reveals this to you at the start of a year, then you can put together a plan and readjust your forecasts before it is too late. This is the reason it’s recommended that you perform stocktaking twice a year—one at the start of the year and another six to seven months later.
Investigate Product Performance
Tracking the products to keep and the products you can do without is not as easy as it sounds. However, with stocktaking, you can drastically improve your chances of achieving the above. By putting a focus on the above for you, stocktaking will reveal which stock you need to move on and which stock you need to sell more.
For example, if most of a stock/product has been on the shelves for days or months, then you can be sure that it’s not very popular and you’ll need to either slash prices or end the production to avoid loss. On the other hand, if a stock has been selling like hotcakes recently, then you can increase its production to maximize the revenue from it. So, by revealing valuable information about a product, stocktaking allows you to investigate its performance, which in turn allows to make the changes required to minimize the loss or maximize the revenue associated with the product.
Enable a Better Stock Ordering Process
By highlighting any shortages that you weren’t previously aware of, stocktaking will encourage you to order more of the products that you’re selling well. Additionally, stocktaking will identify any pallet that is damaged in transit, not delivered or stolen. Even the most sophisticated inventory management system cannot pick up on this. This is what stocktaking incredibly important for all businesses out there, especially those require retail stocktaking or food & beverage stocktaking.
Stocktaking is an important part of running a business and if you’re not using it, then you’re operating your business wrong. Want to perform stocktaking for your business? Then get in touch with us today!