Benefits of Stocktaking For Small Businesses – Stock taking is the process of physically counting the actual stock you have on your site(s). Apart from your business address, sites can also include any storage or warehouse facility you may own or are renting. It is the process of counting the actual physical stock and checking the numbers against the numbers you have on your books. A stock take will identify any issues that arise in a loss of stock as well as offer data to conduct your own regular product performance analysis so as to maximise gross profit margins. Businesses need to conduct stock taking for he following benefits:
Increases profit while reducing loss and waste
Businesses can increase profit margin by getting a realistic view of what you have, what is selling and if things are going wrong to capture them at the earliest opportunity. Stocktaking is the physical counting of all stock and matching it against the stock numbers you have recorded in your books/software.
Monitor real time stock levels
The data of the Stock take will clearly be the most up-to-date check and cross-reference data of what you have to what you should have and what you actually have. Unfortunately, theft and damage can occur. The stock take will uncover these as discrepancies and allow you to be proactive and responsive to this unfortunate reality in a timely manner, again showing the importance of stocktaking for a business.
Monitor seasonal stock and stock with expiry dates in a timely manner
Time is essential when it comes to seasonal and stock with expiry dates, simply because they are time restricted. So, you must monitor this type of stock and ensure as much of it is sold before you are forced to sell it at a reduced price. If you do not maintain an importance of stocktaking, you will not know what you have and this will lead to a loss of gross profit not only in the direct sales as expired or obsolete stock may need to be thrown away but also in the cost of warehouse / storage if you are unaware and so this stock is taking up the space you could release for new stock.
Review pricing strategies to keep up to date with your current purchase prices
You can monitor through carrying out stocktaking your purchase prices at the time of stocking against the latest purchase prices as you will be able to monitor and track changes in the market and how it will impact your margins. It may be that there are certain times in the years when the purchase prices rise and so you will be able to make a calculated decision based on your sales report generated from the stock take if it would be worth making an earlier investment than originally planned. It will also give you an idea if you should be looking at the pricing of your products.
Getting your assets right on the balance sheet
Inventory is the balance sheet entry as an asset, hence, very important. This number has to be as accurate as possible, which alone emphasises the importance of stocktaking. The data you will be collecting and updating as a key purpose of stocktaking has a direct financial impact has ‘asset gain’ or ‘asset loss’ (also known as shrinkage). This is the reason why the accuracy of inventory value is subject to all internal and external financial audits.
Providing accurate stock records of which products are performing well
The accuracy and regular process of stocktaking will help with making an informed, data-backed decision to invest in the right products, as it will show you which products are selling and which are not and therefore what to invest in. You will also be able to see if there is a dead stock that you should think about possible flash sales to shift the stock.
Reduction of stock holding
Achieving optimal stock levels versus consumption levels will ensure stock holding is kept to a minimum at all times. Reducing stock holding is important as it ties up cash and reduces potential losses. This is particularly relevant on draught beers and other products that have relatively short best before dates. Stocktaking will point out where stock holding can be reduced, freeing up previously tied up cash.
Improved working conditions
Stocktaking will uphold required working conditions, such as a tidy, organised and efficient operational working space. Operational efficiency relies on clear and organised work spaces. Stocktaking provides the data necessary to keep stock holding to a minimum at all times. This means that the space you have in your establishment is utilised as effectively as possible. More space means better movement in the venue for your staff (with automatic health and safety benefits), as well as better oversight of the stock holding areas, such as the cellar and fridges.
Conclusion
Above are some of the Benefits of Stocktaking For Small Businesse.
Stocktaking is foundational to stock control management. It provides you with the information you need to run a profitable and operationally efficient business.
A good stocktake report will include: cost prices from supplier invoices, selling prices based on price tariffs and wine lists, opening and closing stock figures, purchases and sales for each individual stock line, the value of sales at cost and selling price, gross profit percentages achieved on each stock line and the number of days stockholding.
Speak to Robisearch Limited today about our services and start benefitting from stocktaking today! Contact us on 0716413386 or 0780655987.