If you hold stock, the number in your books and the number on your shelves will drift apart over time, through theft, damage, mistakes and miscounts. A regular stock count (stock-take) finds the difference and lets you correct it. It also matters for your profit, because the value of closing stock affects your accounts. This guide is general information.
Why count stock
- You find missing, damaged or out-of-date stock.
- Your profit is more accurate.
- You avoid running out of fast sellers, or over-ordering slow ones.
- Your year-end accounts and tax figures are right.
Plan the count
- Choose a quiet time, such as the end of the month or the year.
- Print or export your current stock list.
- Stop receiving and shipping during the count, or record what moves.
- Divide the space into areas so nothing is counted twice or missed.
Counting methods
- Full count: count everything at once. Simple but disruptive. Best once a year.
- Cycle counting: count a small section every week, so everything is counted over a few months.
- Spot checks: count the highest-value or fastest-moving lines more often.
Count carefully
- Count in pairs, one counting and one recording.
- Record what you count, not what the list says.
- Mark counted items so they are not counted twice.
- Note damaged or expired items separately.
Investigate the differences
Compare counted quantities with your records. For each difference, ask whether it is a miscount, a late entry (a sale or delivery not yet recorded), damage, theft or a data error. Recount anything large before you adjust.
Record the adjustments
Once you are confident in the count, enter stock adjustments to bring your records into line, with a reason for each. Write-offs reduce the value of your stock and show up as a cost.
Value your stock
Your stock is normally valued at cost, or net realisable value if that is lower. AvrioBooks uses weighted-average costing, so the value of what is left updates with every purchase and sale.
After the count
- Review the biggest variances and fix the cause.
- Update reorder levels.
- Lock the period so the adjusted figures do not change.
Read our guide to stock and cash around Christmas.
How AvrioBooks helps
Inventory on the Premium plan tracks quantities, weighted-average costs, stock valuation and movements, and lets you record adjustments after a count. See inventory management software and products, services and inventory.
Frequently asked questions
How often should I count stock?
At least once a year for your accounts. Many businesses also do cycle counts of a section each week, or spot checks on high-value lines.
What should I do if the count differs from my records?
Recount large differences, check for late entries, then record stock adjustments with a reason for each.
How is stock valued?
Normally at cost, or net realisable value if lower. AvrioBooks uses weighted-average costing.
Does AvrioBooks track stock?
Yes. Inventory is on the Premium plan, with stock valuation, movements and adjustments.
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