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 all the inventory that your business currently has on hand. It’s an integral part of your business that impacts your inventory management, sales, and purchase.
Stocktaking is more than just stock management. It’s all about taking the record of products in an inventory, and products that are running out of stock. While 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. There are also several differences between these two terms that set them apart from each other.
What is the Difference Between Stocktaking vs. Stock Checking?
Although stocktaking and stock checking are about calculating the inventory stock, the main objective is different. Stocktaking is the process of checking the quantity and condition of the inventory stocks. It is about ensuring that the inventory is in good condition and meet the demands of the customers.
Stock checking is the process of systematically checking the quantity of the inventory. It gives the ability to understand the quality of stocks that a company currently has on hand if a company will meet the required production number and the demand of the customers.
Both the processes are equally important for a company. There is also a difference in the frequency levels of stocktaking and stock checking, depending on the company production quantity. The volume of the finished products can be conducted either monthly, weekly, or daily.
But it has a significant impact on a company’s stocktaking and stock checking procedures. The smaller firm prefers stocktaking products on a daily or weekly basis. In comparison, the more prominent firms prefer manufacturing done either on a quarterly or annually basis. However, stock checking should be done almost continuously.
Both processes give you a fair idea of the amount of stock in your inventory, depending on the sales volume. It is good to get the stocks checked daily. This will help meet your customer demands, and you will always be prepared for it. The problems can be identified immediately if the stocks are checked daily.
Let’s take an example of the bad weather conditions that cause adverse effects on the company’s inventory. Stocktaking is done to help companies to make sure that they don’t waste any inventory and meet customer demands without damaging or replacing the finished goods.
While stock checking is the process to ensure that your inventory is managed systematically to check the annual stock, maintain and monitor the perpetual inventory system.
There are five different ways to conduct stocktaking depending on the company’s system.
What are the Methods of Stocktaking?
- Period Stock Count: Periodic stocktaking can be done on a monthly, quarterly basis, half-yearly to check the entire inventory stock.
- Perpetual Stock Count: With this method, stocktaking is done continuously throughout the year for each item available in the inventory.
- Validation of Stockouts: This method of stock validation is done when a few particular items are out of stock or levels of stock or very low.
- Annual Evaluation: Annual stocktaking is completed once a year to confirm your gross profit margins, stock levels, and pricing strategy.
- Accuracy Check: Accuracy Pick is the process to check the picking of orders from a warehouse. The process keeps a check on items that are going out or coming in against the invoice.
What are the Methods of Stock Checking?
- Checking All Incoming Stocks: 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 the 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 company can meet the inventory demand whenever required.
Inventory checking or stocktaking is crucial to any eCommerce company that manages an inventory. By matching the inventory requirements to the quantity and quality standard, companies can adjust their existing inventory records, detect unusual discrepancies, and improve inventory management.