The importance of stocktaking: 5 reasons why any business needs regular stocktakes.
If you have been putting off your first stocktake, or are even thinking if you need one at all, we hope this article will re-motivate you! If your business is small or large it pays to complete regular stocktakes – literally!
By completing regular stocktakes and having an insight into your stores you will find new ways to increase profits and improve your business.
Let us convince you that stocktaking is integral to any business.
What is Stocktaking?
Stocktaking is the physical counting and verification of items held in store or warehouses. Stocktaking frequency can vary from business to business some prefer once or twice a year while others prefer more frequent counts quarterly or monthly.
Variations between your manual stock and your records allow you to pick up on many different issues and enable you to put processes into place to ensure better stock control and management. This in turn will lead to increased profits in the future.
5 Reasons why any business needs regular stocktakes
1. Uncover theft and identify stock shrinkage issues
Reality in the retail business is that theft happens and will always impact your stocktake numbers and cause discrepancies. You will never be able to stop shoplifting completely but by having a regular stocktake you can highlight if a security review is required and could discourage rogue employees from stealing. A stocktake undertaken regularly will also show problems with damaged stock, unprocessed or missing orders and poor stock control practices.
2. Ensure business targets are achievedIf you identify discrepancies within your stock numbers this will equate to discrepancies in financial figures that are required to hit your business targets. It is much better to find these anomalies sooner rather than at the end of a financial year and you do not have time to put a plan together.
3. Determine product performanceIt is important to be aware of which products sell and which do not. A stocktake will put this in focus for you – if you have large numbers of stock of one product that have been on the shelves a while this could be a good indication it is not selling well. So you may have to reduce the price or move the product to a different location to move the stock on. This also works if you have less stock than expected of a product the reason this could be is because it has sold well or is in a good location.
4. Maximise stock ordering processStocktaking as previously stated will highlight stock shortages you may not have been aware of and this will prompt you to reorder the products that are selling well. Also you may have on record that a whole pallet of popular items are available but after the stocktake it is identified that the pallet is damaged in transit, stolen or not delivered.
5. Strengthen your pricing strategies
A stocktake will put your finances into the spotlight. A stocktake gives you the perfect opportunity to analyse your sales, profits, which products are flying off the shelves and those staying on the shelves. It is an ideal time to revise pricing strategies to enable you to maximise profits.