16 Mar Stock Taking | Making it work better for your business
Stock taking is one of the most fundamental tasks for any business (not just retailers), who buy and maintain product, before they eventually sell it.
For many retailers, stock taking is seen as a major chore, and something which is often put on the long finger until absolutely necessary, particularly if you hold a lot of stock, or your stock make-up is complex in nature. A major stock take traditionally necessitates you closing your doors while the stock take is completed, so it can result in lost sales.
However, with the right tools, such as Meridian EPOS, stock taking doesn’t have to be such a chore and may not necessitate such a significant impact on your business.
Stock taking versus Cycle Counting:
Traditionally, retailers ran a stock take once a year. This is essentially because of the large volumes of stock to be counted, the manual nature of the count and the fact that the store usually had to close its doors when running a stock take.
Contemporary thinking would suggest that stock takes should be done much more regularly, particularly if it identifies a problem which needs fixing. A regular stock take, which may involve a smaller sub-set of stock or department, can identify issues quicker, should be easier to implement and may negate the need to close your doors to business while this is going on. This type of stock take is typically known as cycle counting, where you effectively run a mini-stock take on a more regular basis.
This approach has become very popular with retailers because it’s easier to do and doesn’t result in the same level of disruption as an annual stock take, where closing your doors is simply not an option. It’s also popular because you can identify issues quicker, e.g. back orders, theft, or over-ordering.
Cycle counting is complex however, and requires accuracy of count and a stable system which can manage such an approach, such as Meridian EPOS. For this reason, some retailers still use a mix of both, cycle counting across departments every few weeks or months and backing this up with a major annual count once a year.
Why bother stock taking?
Stock taking is critically important for all businesses. In some sectors and in some jurisdictions, stock taking is even a legal requirement. But it makes sense for a whole lot of reasons. They include the following:
- Highlight a problem in your system
- Confirm you are meeting your financial targets
- Cross check actual stock versus system stock
How often should you stock take?
Stock taking, particularly, major stock takes, take time and are disruptive to business. The frequency of stock takes is dependent on numerous factors, such as type of products you’re selling (you may choose more frequency for more perishable items); your ability to withstand (and your customer’s tolerance to withstand) the disruption associated with stock takes; your stock taking systems (better systems like Meridian facilitate more regular stock takes); and, your product tracking accuracy (again better systems facilitate this process).
But the more often you undertake the process of stock taking, the better your checks will become, the fewer the variances or discrepancies and the more certain you can be of your system’s accuracy. Clearly, if your business can accommodate it, the more you should do it. It’s good practice; it identifies problems and it provides you with the tools to fix these problems.
What can you do to improve your stock taking practices?
There are lots of simple things that every retailer should consider which can help the process.
- Plan your stock take
- Avoid distractions
- Use a process
- Use a barcode scanner
- Keep your stock area tidy
- Involve all key staff
- Use a good Stock Management system