Stock taking is an immensely important part of the gross profit calculation and is relied upon to indicate performance.
It is also a legal requirement to be performed at least a year for auditing purposes.
A good stock take should be:
- Efficient (the count is made in the shortest time possible)
- Complete (every item is included)
- Accurate (items are counted properly)
- Clearly documented (for recording purposes)
The following guide is intended to outline step by step, each stage of both the preparation and execution of a best practice stock take.
In order to achieve a good stock take, as much as half the entire time should be spent preparing for the count and subsequent investigation. Allocating sufficient time to a stock take will go a long way to ensuring it is efficient, complete and accurate. Before beginning the actual count, three main areas of preparation should be covered:
- Update all transactions on the system
- Organisation of the stock itself
- Print out of the stock sheets
As traditionally the stock take is carried out in the morning, it is recommended that the above tasks are carried out during the preceding days up to a stock take. This will avoid a panic on the day and save huge amounts of precious "investigation time" on the day.
Update all transactions on the system
Typically, there is an entire stock period in which to enter all the transactions. It is best to carry these tasks out "as you go" however, often there will be a few credits or transfers that need entering for the final few days. Make sure everything is entered before beginning a count. It will be practically impossible to reconcile a stock take if there are outstanding transactions to process. In addition, if the entry of transactions is left until stock take day, it will be a rush to complete and mistakes are likely to be made.
Organisation of the stock itself
As much as 50% of the time allocated to stock taking should be allocated to preparing the items you are about to count. Here is a list of the most important things to look out for grouped by stock location.
- Remove empty kegs; make sure access to open and full kegs is not hindered
- Remove bag in box from boxes to make counting easier
- Make sure wines in racks are in the correct position and numbered/labelled
- Ensure wine labels are facing upwards
- Ensure all cases stacked are full.
- Make sure all spirits are facing the right way
- Make sure all cases of spirits are full
- Make sure all bottles are in the correct position and correctly labelled
- Empty fridges and place items on or outside the bar to ease counting
- Consolidate low value stock where practical (wines, pouring spirits)
- Turn all bottles so that the label is facing out, but volume can still be read
- Remove empty boxes
- Make sure all like for like items are regularly stocked with each other
- Make sure the labels are facing outwards and easy to read
- Remove empty boxes
- Make the scales available
- Make sure items are in the correct place according to labels
- Empty fridges of items that require weighing
Print the Stock Sheets
- Doing this in advance but within the stock period and preparing the sheets on clipboards will ensure that on arrival, the stock take can be attacked quickly.
- It also avoids any issues like running out of paper or printer ink that might waste precious time.
The count itself should be carried out by two people: one counting and one writing. This ensures that stock items are not skipped and makes the count more than twice as fast as one person counting.
Typically the count route is established at the start. It is recommended that the various stock areas are counted in separate columns on the sheet so that it is easy to find the count during the investigation
Here are some a few golden rules of stock take entry:
- Always enter "From Shelf to Sheet"
- Ensure figures are legible and small enough to allow room for further entries
- Never fill up the row if it can be helped
- Mark down mistakes rather than "scrubbing out" entries as this causes confusion later on
There are various methods of describing the main entry types (decimals, wholes and cases and mistakes). Here is an example:
- 1.1 + .2 + 3 (3) in this entry the total is 1.3. 3 units have been counted, then corrected later (in brackets = minus)
Once the stock take has been entered, the following steps should be carried out:
- Run stock reconciliation report
- Check the stock was entered correctly from the sheet to the system
- Re-count differences
- Update stock count sheets
- Update the system
- Re-run stock reconciliation report
These steps should be repeated until the stock count is correct but only up until a specific time decided by the business.
Further discrepancies should be investigated by checking and rechecking the transactions that have been entered and that sales and recipes are correct.
Remember, it's vital you decide on a time to finalise the stock count to ensure the count is not being entered days after the actual end of period.