Tips for doing a stocktake
Stock is anything that your business makes, buys or acquires for trade or to change into other goods. Stock is sometimes also called trading stock, inventory stock or inventory.
What is a stocktake?
A stocktake is when you physically check your stock to make sure your records are correct.
A stocktake also lets you work out the value of your stock at the end of financial year for tax purposes. To do this, you:
1. work out how much stock you have
2. determine a monetary value for each item of stock.
This is important because the increase or decrease in the value of your stock may be used to work out your tax for a financial year.
A stocktake is usually done at the end of each financial year. However, you can do them more often if you need to update your stock records.
Do I need to do a stocktake?
Sometimes, you need to do a stocktake to meet your tax obligations. You must do a stocktake if either your:
1. annual income is more than $2 million
2. inventory level has changed by more than $5,000 since the last financial year.
Advantages of a stocktake
As well as meeting your tax obligations, some of the advantages of doing a stocktake can include:
1. detecting theft
2. finding out what inventory you need to buy
3. making sure you don’t have too much or too little inventory on hand.
Costs of a stocktake
As well as benefits, doing a stocktake has costs. Some of the costs can include:
1. accidental damage since people are physically handling your stock
2. hiring extra employees to help you with the stocktake
3. possible lost income due to using time to check inventory rather than selling goods and services.
A stocktake can be time consuming if you have a lot of stock.
A stocktake sale is a marketing technique to lower your stock levels before doing a stocktake.
Since the costs of doing a stocktake are higher when your business has a lot of stock, it’s a good idea to do a stocktake sale before running a stocktake.
Other benefits of doing a stocktake sale can include:
1. higher sales
2. improved customer satisfaction
3. selling inventory before it goes out of season, such as clothes that have went out-of-fashion, or obsolete, such as a phone that customers no longer buy because newer phones are available.
Tips for conducting a stocktake
Before you do a stocktake, check out these tips:
1. Consider doing a stocktake outside business hours – Sometimes, doing a stocktake during business hours can dissatisfy your customers. Depending on your customers, it can be a good idea to do a stocktake outside business hours.
2. Consider having a supervisor at each stocktake location – Doing a stocktake can be complicated. Having a supervisor at each stocktake location can help your employees do the stocktake successfully.
3. Don’t do a stocktake too often – There are costs to doing a stocktake, so it’s a good idea to only do them if it is helpful, such as detecting theft or finding out what stock you need to order.
4. Plan before your stocktake – It can be hard to keep track of your inventory when you do a stocktake. It’s a good idea to plan doing a stocktake before you starting doing one. For example, make sure you have stocktake sheets ready to be filled in and your employees know what stock to count.
5. Train and guide your employees – Make sure your employees know what to do. Give your employees what they need to record their stocktake, such as a stock recording sheet, pen, calculator and clipboard.
6. Consider using casual employees – Consider giving casual employees extra hours to do the stocktake. This can let your other employees serve customers, so that your business doesn’t miss opportunities to sell its goods and services.