Why is stocktaking important?

Reasons for having a stocktake

1) Retailers are advised to undertake regular stocktakes. If their business is managed by staff, we suggest quarterly checks as it is common knowledge that the biggest area of stock losses is through internal staff pilferage. Having quarterly stock checks acts a strong deterrent as well as assessing in which areas stock is going missing.

If the owners run the business, either six-monthly or yearly is quite adequate.

2) Taking regular stocktakes enables you to monitor your gross profits and shows up any areas where these profits are falling short. It can therefore be adjusted very quickly, minimising any losses.

Security in any business is vital to its success, and regular stock checks reduce and in many cases stop internal pilfering, again saving owners a lot of money. If pilferage remains unchecked, it will in many cases escalate to levels whereby the business may fail.

Taking an annual stock check is essential in order to enter a correct closing stock figure in your accounts. Estimation by accountants or guessing the figure yourselves is no longer acceptable to the Inland Revenue and Customs and Excise; they like to see an independent company providing an accurate evaluation of stock presented on a Certificate of Valuation. Failing to carry this out correctly can lead to investigations from both these departments, which in turn could be extremely costly.

Regular stock checks also identify over-stocking, under-stocking, stock being lost through date expiry and damaged or soiled stock.

3) Apart from the points mentioned above with regards to the various government departments wanting to see a professional independent valuation, the benefits of using a professional stocktaking company experienced in your trade is that you can be sure of accurate work, they will be quicker and more qualified to assess your stock professionally, and if you take into consideration the fact that professional stocktakers make a living from this profession, if they have been in business for some years it should reassure you that they are competent at performing the task correctly.