Did you ever wonder how on earth the supermarket staff manages every single item in the store? What if there is a missing, damaged, or out-of-stock item? The answer is stock-taking. But what is stock-taking? And why is it essential for your business? Read along to know more about it.

Definition of stock-taking

Stock-taking is the activity of calculating the inventory in the warehouse before being sold to customers. Generally, this activity requires a lot of time, since you have to count every single item in the warehouse manually. Not only it takes time, but the stock-taking process also requires the next level of accuracy to avoid miscalculation. Even a little one could impact the amount of stock to be sold later.

Luckily, we have the barcode system to make the stock-taking process runs swiftly and efficiently. The system is also useful to minimalize mistakes that could happen during the counting. As a result, the stock-taking process will be more accurate.

stock taking

Companies do stock-take as a measurement to cross-check whether the amount of inventory in the warehouse matches the company’s record. If there are more items found in the warehouse than in the documents, it’s necessary to check whether there are unrecorded transactions or there is a recording error.

But if you found that there are lesser items compared to the record, then there are two things that you should do. First, create an adjusting journal entry for the missing objects. The second, charge the staff responsible for the warehouse management to replace the missing items.

The benefit of stock-taking

Other than the cross-checking function, stock-taking also has other benefits. Here are some of them:

  • Minimize fraud
  • Reduce the possibility of out-of-stock inventory
  • Able to take immediate action when there’s a shortage or missing items
  • Usable as a benchmark for the company development
  • The incoming and outgoing inventory traffic is listed.
  • Easily monitor the inventory condition and expiration date.

The best time to do stock-take

Every company has its own opinion about the subject. A business with less inventory can do the stock-take at least once a month. But if your business has thousands of items, then once or twice a year is the best option.

Since the process takes a lot of time, most companies usually do stock-take every four months. Stock-taking also requires special procedures, so the company operations would not be interrupted.

How to do stock-taking

Before the counting begins, there are some preparations to do. Here are some of them:

  • Do it outside of working days/hours: the counting process will be faster since there are no customers. So you can focus on the process.
  • Take someone else with you: having a colleague beside you can help you correct things if there’s an error.
  • Prepare the documents: stock-take requires documents for recording. Prepare everything you need before you begin counting.

After the preparations are complete, the next thing you do is do the stock-take. But make sure you consider the following points to make the process runs smoother:

  • Be thorough: this task requires a person with a high level of accuracy. Without it, the risk of miscalculations will be higher, and the company will bear the loss.
  • Create a comprehensive report: when you have done the calculation, the next thing you need to do is compile the reports. Report everything, including missing items, or near-expiry items.


We can conclude that stock-taking is troublesome and requires a lot of time to complete. But with the help of ERP software, you can do this inventory management task swiftly.