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How To Do A Stocktake – 8 Simple Steps

How to do a stock take

An important task for every business is the ability to properly undertake a stocktake. This is when a business records the number of units held for every type of product / inventory along with its current value. The end result is a stock take of all stock held by the business.

It’s important that a business has good controls and processes in place for counting and recording the current stock holding. Sometimes businesses will use dedicated technology to do this, others will manually count by hand. Regardless of the method used, it is important staff are well trained to ensure accurate reporting of stock positions.

8 simple steps for completing a stocktake:

  1. Understand what needs included in the stock take
  2. What method you will use to count the stock – manual or using scanning devices
  3. Have a consistent process for counting that is followed by everyone
  4. Count the stock
  5. Use this data to compare against previous stock take or other records
  6. Update records with new totals
  7. Set a regular schedule for completing stock take and updating records
  8. Perform an audit of the stock takes being completed to ensure consistency and accuracy

Recording the amount of stock held is important in the successful operation of any business of any size. Stock takes can provide valuable insights and allow process improvements which can lead to increased profitability for the business. Depending on the size of your business, there are a variety of methods that can be used to complete a stock take.

Whatever method is used to complete stock takes its essential that everyone performing these duties are consistent in their approach. This will provide confidence in the accuracy of details being recorded.

In this article, we will look at how to perform a stock take, provide some tips on best practice as well as highlighting some of the most common errors encountered when performing the count.

What Is A Stocktake?

A stock take is the process of counting and recording the quantity and current value of units held within a business. Usually, there would be a set schedule as to when this will be performed such as weekly, monthly or annually, or triggered by certain events like attending an event that depletes stocks. There are different methods for performing these duties and depending on the size of the business may determine if count is completed manually or whether some sort of scanning technology would be required.

The data collected during this process can be extremely beneficial to a business. It can allow them to track things such as the cost of goods sold, any loss of units through things like theft or damage as well as making sure you have sufficient stock to satisfy any client orders.

It’s essential for businesses to perform stock takes whether it’s done internally by staff or managers or whether a third-party service provider is hired.

8 Steps To Stocktaking

Decide what needs to be counted

Understanding the scope of what a stocktake will cover is the first step in the process. Depending on size of operation, the method and frequency of stock takes will differ as smaller organisations may require less detailed counts than larger operations.

Items included in the stocktake will invariably be a physical product which can be easily counted. It’s important to have an understanding of your stock position, as it may highlight some trends in your business which could be useful such as damaged products. Ultimately, it’s a good idea to know your stock position so you know there’s enough product to meet customer demand.

Choose a counting method

After the scope of the stocktake has been agreed, it’s important to decide how this process will be carried out. It could be by using scanning devices or by counting the items manually and would usually be determined by size of operation and requirements of the stocktake.

Depending on the size of inventory, it might be possible to go through each of the items and manually record the number of items and the details. This method would usually be used when the number of items to be recorded is small. For larger inventories, it might not be possible to count items manually. In these scenarios it might be best to use some type of scanning software and devices.

Using some type of software scanning device is a much quicker way to accurately record the number of items held by a business. By using this method, even though you may have multiple different products, it will allow a consistent process regardless of the items being counted.

Testing the stocktake process on a smaller set of items before rolling out for full organisation is wise. This will highlight any gaps or issues and will help refine your process providing the best chance of your stocktake giving you the information you require. This would be particularly effective for large organisations or inventories to ensure processes are consistent and counts accurate.

Train anyone involved in the counting

It’s important that anyone who is involved in the stocktake is trained on the process and comfortable with how to perform and record the count accurately. This will ensure consistency in the process which over time will give more accurate details on the inventory position and potential insights for the company.

If you yourself are conducting the stocktake this step can be ignored however, it’s still advised that you follow a consistent process for accuracy.

Do the count

After deciding on the important prerequisites – being scope and method – and making sure anyone involved in the count is trained on the process, it’s time to start the stocktake.

Depending on the method of counting you have decided on, you may need some further tools to allow you to perform the count successfully. For example, if it’s a smaller count being done manually, you will likely require stationery such as paper and pens as well as a calculator. If inventory is too large to be done manually, then you will require some scanning devices and potentially a computer for entering and maintaining the stock numbers.

Conducting a stock take properly and accurately can be a time-consuming activity but it’s important not to rush it. If resource allows, having a separate check to your count – such as another employee looking over numbers or potentially re-counting themselves anyway – as this will ensure accuracy when recording inventory.

Compare the count to your records

Once the inventory has been counted, it’s important to compare against previous stock takes. This should highlight any discrepancies between previous stocktake, number of units sold since last stocktake and the most recent stocktake. It may also provide further insights as to how the discrepancy has arisen. Companies can then use this information to refine their stocktake process if there are several discrepancies being highlighted throughout each count.

Update your records

When you have completed the stocktake and resolved any discrepancies which have been highlighted, the next step is to update your inventory records. By updating these records after each count, it will give an accurate up-to-date stock position which is essential for effective stock management.

Repeat the process regularly

A good way to keep an up to date and accurate inventory is to regularly schedule stock takes. It’s crucial that these are planned in advance, as it can be disruptive to the business operation, especially if you have a large inventory.

Different businesses will have different needs and as such, will have different requirements for how regular the stock takes should be. For high trading businesses a daily stock take may be required although as it’s a time intensive process, it’s likely most businesses would choose to schedule the stock takes weekly, monthly or annually.

It’s important that the stock takes are undertaken at a time that limits inconvenience for the business. If the stock take is being done by internal staff, it may be sensible to do on a non-business day then reward staff with dinner as an extra thank you.

Audit stocktakes

Auditing stocktakes is also an important part of the process. This will highlight any inefficiencies in the process as well as any discrepancies in the actual count and is most important when you are not conducting the stocktake yourself.

Auditing the stocktake would involve checking certain details of the count or comparing the count to any sales made since the last count. This will help to accurately record inventory and make sure the process is working as designed.

Electronic Stock Management

As we know, managing your stock is a key part of any business but what if your inventory is too large to count manually? It may be best to implement an electronic stock counting system. This should reduce the time needed to complete stock count and is likely to be more accurate than any manual counts.

Electronic stock counting systems will help scan and then record inventory levels in the systems database. These details can then be tracked to understand your current stock holding as well as how many sales there has been of a particular item and at what stage the customer order is at.

Not all businesses will require an electronic stock counting system due to the size of the business or inventory, but it could still help reduce cost and time spent on stock takes.

This can also provide further information which can help provide a better service to customers such as tracking on the stage of their order or accurate information on whether a certain product is available. Electronic counting systems can improve the stocktake process and save businesses time and money which ultimately helps profitability.

Managing Your Stocktake Team

Managing the team performing a stocktake requires a good communicator with excellent organisational and people management skills.

Stocktakes are time intensive, critical operations for any business and it’s important if you are managing a team to remain calm and provide any additional support required to complete the process. This main aim is to accurately complete the count and by offering this support and guidance, it gives the best chance of achieving it.

Each task within the stocktake should be delegated to an appropriate team-member and a clear deadline provided for the task to be completed. As well as regular breaks, if resources allow, consider assigning two people per task. This can help with consistency in the process as well allowing time for more regular breaks or any double checking required.

After the stocktake is complete, it’s sensible to look back over the activities that have taken place and identify any strengths or weaknesses in the process and implement steps to make the process more efficient if possible.

Finally, thank your staff again for all their hard work!

Improving Efficiency

Due to the resource intensive nature of stocktakes, it’s a good idea to try and schedule this with any other company events to minimise any disruption on the business and take advantage of any potential savings in time or money.

A good example of this would be when businesses schedule their stocktake at the same time as their financial year end. This allows not only the stock take to be completed but the information collected within the stocktake to be used for filing tax returns,

Another good example would be when businesses combine the stocktake with any marketing events the company is currently running. This can help provide valuable information to the company and allow them to push certain products if the inventory shows its aged stock or selling well. It can also allow the companies to give away discounts or free products if they have some stock that they need to clear out.

Depending on the size of the business and stocktake, it could be combined with company events such as social gatherings. This means the business could conduct the stocktake during the day while putting on a social event for all staff at night either as a thank you or as a planned event like a Christmas party.

This can help the business make the most of their resources and time available.


In this article, we have looked at what is required to complete a stock take and some helpful hints on creating a process for doing so. By having an efficient process, planning and proactively managing your team conducting the stocktake, it’s more likely your stocktake will be successful and provide your business with valuable insights.

To improve efficiency, consider using a scanning system that tracks and records inventory which will provide savings in the time spent manually counting and recording the items. This can be beneficial to any organisation but more so larger organisations with huge inventories.

Finally, a stocktake is a key operation when running a business as it allows you to track your stock which ensures you have accurate information to provide the customer on whether you can meet the demand.



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