A lot has been discussed about inventory management, but it still isn’t complete without discussing stocktaking and stock checking. Stocktaking or stock counting is the process of manually checking the records of the inventory that your business currently has on hand. It’s an integral part of your business that impacts your inventory management, sales, and purchases.
Stocktaking is more than just stock management. It’s all about taking the Differences Between Stocktaking record of products in an inventory, and products that are running out of stock. Quite similarly, stock checking is the process of verifying stock levels and the quantity on hand.
The inventory stock of a company can be managed via stocktaking and stock checking. In this article, you shall learn about the difference between stocktaking and stock checking, the methods followed in both processes and the pros and cons associated with them.
An Overview of Stocktake
As mentioned before, stocktaking involves manually counting all the goods that form a part of the inventory. This is why it is also known as stock counting. Additionally, it also involves checking the condition of these products to determine whether uganda phone number list they are fit to be sold. This process is crucial in making decisions related to the purchase and production of new goods.
What are the Methods of Stocktaking?
Here is a look at the various methods of stocktaking:
- Period Stock Count: Periodic stocktaking can be done on a monthly, quarterly basis, or half-yearly basis to check the entire inventory stock. This Differences Between Stocktaking method keeps you updated with the stock available and the costs of the goods sold. Errors cannot go unnoticed for a long period with this method. Any kind of discrepancy can be identified and addressed timely if you carry out periodic stocktaking.
- Validation of Stockouts: This method of stock validation is done when a few particular items are out of stock or levels of stock are very low. Stock-out validation is not needed if the stocktaking processes are managed properly at regular intervals around the year.
-
Annual Evaluation:
- Annual stocktaking is completed once a year to confirm your gross profit margins, stock levels, and pricing strategy. Many businesses prefer having an annual stocktake in the last month of the Differences Between Stocktaking financial year. It is necessary for generating annual stock reports. It is necessary to understand the gross profit margins and assess whether the pricing strategy is satisfactory or not. However, an annual evaluation alone cannot ensure good control over the inventory; a monthly stocktaking is also needed. This helps address issues promptly.
- Accuracy Check: Accuracy Pick is the process of checking the picking of orders from a warehouse. The process keeps a check on items that are going out or coming in against the invoice.
- Spot Check: Also known as line check, it is usually scheduled beforehand. However, it may be an impromptu or random check at times. Businesses that suspect malpractices or theft going on in their premises often consider random spot checks. The Differences Between Stocktaking process involves tallying the stocktakes in your software with the available inventory. Discrepancies between the two can be identified with a line check.
Pros and Cons of Stocktaking
Let us begin by understanding the pros of stocktaking:
- It provides complete information about the available inventory.
- It enables better warehouse management.
- Precise information about the inventory helps in predicting future customers. demands, which in turn helps in better business planning.
- It helps in generating financial reports.
- It helps identify discrepancies occurring because of theft or loss of stock.
Let us now take a look at the cons of stocktake:
- Stocktaking can be a tedious and time-consuming task, especially for businesses that have a huge inventory.
- As it involves substantial time, it can prevent you from investing enough time and effort in other business-related tasks.
- There is a possibility of human error when it comes to manual counting of stocks. Some items may be left unnoticed while others may be counted multiple times leading to discrepancies.
- Error may even occur while recording the quantity of items in the system when done manually. However, the scope of such errors can be reduced by incorporating technology.
- If not carried out efficiently, stocktaking may cause delays in dispatch and can lead to dissatisfaction among customers.
A Brief about Stock Checking
Stock checking takes a smaller subset of inventory into account in comparison to stocktaking. The Differences Between Stocktaking process involves verifying inventory levels for a particular item or a group of items. It is done to ensure adequate stock levels are maintained to meet the consumer demand. Stock checking is carried out frequently because it involves dealing with a lesser amount of inventory at a time.
What are the Methods of Stock Checking?
- Checking All Incoming Stocks: The most important part of stock checking is verifying the items as they are received. You should check all the incoming inventory and orders well from your supplier.
- Validating Stock Levels: To escape out-of-stock situations, you should validate stock levels and forecast the amount of time you need to maintain the minimum stock level.
- Monitoring of Stock Levels: You should always check your stock in real-time to forecast the revenue and losses.
- ABC Analysis: ABC analysis is used to prioritize your inventory items based on their value, quality, and demand.
- Tracking Expiry Dates: If you check does personal branding help monetize a blog? expiry date of products, you can clear the stock before it gets outdated.
All these are done for one purpose to make sure that the Differences Between Stocktaking company can meet the inventory demand whenever required.
Pros and Cons of Stock Checking
Here is a look at the pros of stock checking:
- Stock checking enables keeping a check on different categories of products to ensure that the inventory levels are adequate to meet the customer demand.
- It allows businesses to make informed antarctica business directory decisions related to restocking inventory.
- It helps in making demand forecasts, thereby lowering the risk of stockouts.
- Businesses do not have to face the problem of overstocking if stock checking is done efficiently.
