Stocktakes can be a burden as they are time-consuming and provide little value to your business.
1. The traditional stocktake: Involves counting every stock item. Generally done each time your accountant suggests so that the accounts are accurate, at least once a year.
2. Cyclical stocktake: Regular counts of manageable stock items. You choose stock items to count based on a cycle, perhaps checking higher value items or those with higher sales volumes.
Generally, a full stocktake is more time consuming, has little value and it is disruptive to your normal operation. It’s done usually because the accountant needs figures for the balance sheet to check against your theoretical stock levels.
A cyclical stocktake involves regular counts so it can correct errors quickly. It allows business owners to see process problems quickly enabling them to implement solutions. Since they involve smaller checks, they are easier to manage and less likely to disrupt normal operations. Many stock systems provide a theoretical or management stock report which can be used to check against the physical stock you can see. If cyclical stocktakes are performed well, they are usually sufficient to prove a true and fair picture of the stock you hold.
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