How to plan a successful stocktake. 

With the end of the financial year fast approaching, you should be planning your stocktake now. That’s the only way you can be sure that your closing stock figure is accurate.

An end of year stocktake will also show you how much of your capital is tied up in stock. It will also indicate what impact it has on your cash flow. This can lead to discussions on whether or not you need so much stock in the future or whether you can reduce stock to free up cash.

Your closing stock figure also has a big impact on your profit for the year. So it has tax implications. It also determines your gross margin which is the amount of gross profit you are making before accounting for overheads.

Stocktaking can be a bit of a chore, but with effective planning it should be plain sailing.

Make a plan

Successful stock takes don’t just happen. You also need to consider when the stocktake will take place and whether you need to close the business to do it. Make sure you chose a time when it will cause the least impact to your business. You’ll also need to pull together all the things you’ll need to make the stocktake successful. This will involve stock sheets, pens, clipboards, calculators and the like. Portable scanners are fantastic so consider how you might employ a little technology in the exercise. You’ll also need to organise someone to put all that data into your inventory system.

Assemble the team

You need to consider whether or not you’ll need additional staff to physically count your stock. There’s a temptation to hire students to do stocktaking but be aware that they won’t know the stock like your team does. It’s important to have a number of team members involved in stocktake so that there’s enough knowledge of the business on the day to identify items and make decisions.

Hold a sale

Many businesses hold stocktake sales around the end of March. The reason they do this is to reduce stock, particularly slow moving or obsolete stock (SLOB stock). It’s a whole lot easier to count less stock than too much.

Organise the stock room

It probably sounds like common sense but it’s amazing how many people have the same item of stock stored in several different places. This increases the risk of stocktaking errors and general confusion. Organise your stock room so that all stock items are in the same place.

Ensure your data is accurate

Make sure that the data in your inventory software is accurate. Value your stock accurately by checking that the cost of the stock is current. Be sure to allow for currency fluctuations if you source from overseas.

Separate items ready to be shipped

Make sure that you don’t include inventory that’s already been sold to customers. Store this in a separate area to avoid it being counted with items that are in stock.

Count every item 

The accuracy of the stocktake is really important. The stocktake records form part of your tax records so they need to be accurate. Don’t be tempted to estimate. Count everything. Open up boxes to ensure that the item you think is in that box really is. Mark your stock as you go so that you can easily see it’s been counted.

Check against your records

It’s inevitable that a physical count won’t agree with the items in your inventory software. There are bound to be variances. Make sure to check these and count again if necessary. Missing stock may identify accounting errors or even theft. The stocktake can be an early warning system against trouble in the business.


After every stocktake, take stock of the situation! What did you learn? Did you discover SLOB stock that needs to be discounted or should it just be written off? Are there any concerns around theft and if so what measures can be put in place to minimise this risk? What items were damaged and how can you minimise this in future? Are you over or under ordering certain items? There are a whole lot of things that come out of a stocktake that will drive efficiencies in your business. It might seem like a chore but it will enable you to make informed decisions about the business.