How to do a stock check for your business

If you sell any kind of product, you’ll want to perform stock checks on a regular basis. Otherwise, you may start to lose track of what you have available to sell and what you need more of — which might lead to your business losing money. 

This article will explain what a stock check is and provide a few tips on how to perform a successful stock check. We’ll be looking at the following topics:

• What is a stock check?
• Using technology to help with stock checks
• Performing stock checks regularly
• Being methodical during stock checks
• Free up more time for stock checks with Countingup

Stock checks are an integral part of managing your inventory, so they are essential for a well-run business. Your inventory refers to the products you have ready to sell and the raw materials you might be storing to create more products. A thorough stock check might also count and record all of the tools and equipment your business uses, especially if the tools are single-use or disposable.

Stock check is important for a number of reasons. Firstly, it allows you to determine how much of your company’s money is tied up in your inventory. For example, if you’re concerned that not enough money is moving through the business, a stock check will help you work out if too much unsold inventory is the problem.

Another reason stock check is a necessary procedure is because it helps you with budgeting. You’ll need to set aside money to reorder products with low stock, and you might want to reduce your spending on products that you have a large stock of. If you perform regular stock checks, you’ll know exactly how much money you need to spend on new stock or the raw materials needed to make the products. 

Just as using financial management software is the smart way to manage your money, using technology is the best way to keep track of your stock. There are thousands of ways technology can help small businesses, and stock check is no different.

The simplest way to use technology to help with a stock check is to create a spreadsheet on Microsoft Excel or a similar platform. From there, it’s as easy as putting the number of units of a particular product into a column. You should also label each column with the type of product, so that you know which number lines up with which item. 

You could also use a more advanced software tool for tracking inventory, like Netstock or Zoho Inventory. These can be more useful as they allow you to not only record stock levels but also categorise your records. They’ll also alert you automatically when you need to reorder a particular item.

Another important point is to remember to perform stock checks regularly. This is particularly vital if you need to update a website to reflect your current stock, as you would in an ecommerce business. 

A complete stock check is a big job — many businesses might only do one full stock check per year. For companies with a smaller inventory, the job of checking stock takes less time, so you can afford to do them more frequently. A periodical stock check is a good idea, where you’d be checking stock every month or every quarter (i.e every three months).

Whichever interval you choose, remember to schedule your stock takes by noting them in your calendar. If you have a large inventory (or are running your business alone), it might take you all day to perform a stock check, so you need to plan ahead to make sure you have no other pressing responsibilities on stock check day.

Another option for small businesses is cycle counting. This is most effective when you stock a variety of different products. Cycle counting means that you would perform a stock check on a specific category of products on a set day of the week or month, and then check the next category on another set day, and so on.  This would continue until you’ve performed a stock check on your entire inventory. 

Cycle counting takes longer overall, but requires less time spent checking stock per day and provides a very up-to-date record of your current stock.

A careful, methodical stock check is a good stock check, because you need to make sure you have a complete account of all your business assets, i.e. all of your company’s resources. Remember to write all of your totals down or enter them into the inventory software you use. Although it might seem obvious, it’s important to manually count each item in your stock, instead of estimating or guessing how many you have. 

It’s also a good idea to organise your inventory before you perform a stock check. As well as separating different products into different areas, you should also set aside items that you don’t want to define as stock. For instance, don’t count items that have been ordered by customers and are waiting to be shipped, or items waiting to be sent back to suppliers. 

If you make your own products, and some are still in production, you should set these aside but still count them, as they will factor into your future stock checks. 

As well as performing stock checks for inventory management, every business will need to perform careful financial management. Financial management can be stressful and time-consuming when you’re self-employed, though so consider using the Countingup app to make their financial admin quicker and easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here.