How to count stock in your godown: a stock audit that does not stop the business

Most distributors do a full stock count once a year, usually because the accountant asks. It takes a whole Sunday, the numbers never match, and the difference is “adjusted” so the books can close. Nobody learns why it was different, so next year it is different again.

There is an easier way, and it catches problems while they are still small.

Before you count

• Pick the time. After the vans load in the morning, or after they unload at night. Never while goods are moving.
• Finish the paperwork. Every bill, purchase, return and damage for the day must be entered first. Otherwise you are comparing the shelf with an old number.
• Arrange the shelves. Same product in one place, full cases in front, loose pieces in one box.
• Print a count sheet with product names but without the book stock, so counters are not tempted to “find” the expected number.

How to count

1. Two people per shelf: one counts out loud, the other writes.
2. Count full cases and loose pieces separately, then convert to one unit.
3. Check the expiry date on anything that is close, and note it.
4. Put damaged goods aside and count them on their own line.
5. Only after counting, compare with the book stock.
6. Any product with a gap is recounted by a different person.

Count a little, often

Instead of one huge count, split your products into four groups and count one group every week. Every product is counted once a month, and no count takes more than an hour. Count your fastest sellers and most expensive products every week, because that is where a gap costs the most.

When the count does not match

Before you change any number, check these. They explain most gaps:

• A bill or purchase that was not entered yet.
• Goods still on a van that has not unloaded.
• Goods received from the company but not entered as a purchase.
• Damage or expiry thrown away but not written off.
• Free goods under a scheme given without a bill line.
• Cases and pieces mixed up: 2 cases of 24 counted as 2 pieces.

Write down every gap and its reason in the count sheet. If the same product keeps coming up short, that is the product to watch. See FMCG schemes and free goods and closing a van’s day for the two most common sources.

After the count

• Correct the book stock only for gaps you have explained, and keep the sheet.
• Write off damaged and expired goods at cost, so they show as a cost and not a gap.
• Plan to sell short-dated stock first.
• Compare with last month: is the total gap getting smaller?

How Mulberry Sales helps

Stock in the godown and on every van is updated as bills are made, and unloading a van at night puts what it did not sell back into the godown count, so the book number you count against is current, not last week’s. The dashboard shows opening, closing and current stock for each day. Damaged stock is written off at what it cost you, so it appears in the day’s profit instead of as an unexplained gap at the next count (Growth plan and up). See FMCG distribution software.

Questions people ask