In this guide (13)
- What is stock control, and why does it matter so much?
- Which records do you need for stock control?
- How do you receive stock properly?
- How do you decide which products need the most attention?
- How do you know when to reorder?
- How do you know if you are holding too much stock?
- Where does stock go missing?
- How often should you count stock?
- How do you manage dates and expiry?
- What does a weekly stock routine look like?
- What are the most common stock control mistakes?
- How EasyTaskr helps
- Questions people ask
Key takeaways
- Every stock movement should come from a document: a goods received note, a sale, a transfer or an adjustment with a reason.
- ABC analysis tells you which few products deserve most of your attention.
- Reorder points stop stock-outs; stock turn and days of stock stop overstocking.
- Small, frequent counts of key lines catch errors that a yearly stocktake cannot explain.
- Stock is cash on a shelf, so value it at cost every month.
What is stock control, and why does it matter so much?
Stock control is the routine that keeps the right quantity of each product in the right place at the right time. Get it wrong one way and you lose sales and customers to empty shelves; get it wrong the other way and your cash sits in boxes that do not move.
For most shops and wholesalers stock is the biggest thing they own after property. A business holding stock worth 100,000 at cost has 100,000 of cash it cannot use for wages, rent or new lines. Cutting that by a fifth without losing sales frees 20,000, and good stock control does exactly that.
Which records do you need for stock control?
You need one clean product list and a record of every movement in and out. If the records are poor, every report built on them is wrong too, from reorder suggestions to profit.
For each product, keep:
- A unique code, and the barcode where there is one.
- A clear name that staff can recognise on the shelf.
- The unit you count in, and pack sizes (for example, sold as single units, bought in cases of 24).
- Cost price and selling price.
- Where it is kept, by warehouse and, if possible, by aisle or bin.
- The supplier and lead time.
Then make every change in quantity come from a document:
| Movement | Document | Stock effect |
|---|---|---|
| Goods arrive from a supplier | Goods received note (GRN), checked against the delivery note and order | Up |
| Sale or delivery to a customer | Receipt or invoice | Down |
| Customer return | Credit note, with a reason | Up, if resaleable |
| Move between stores or warehouses | Transfer, sent and received | Down in one, up in the other |
| Damage, expiry, theft, found stock | Stock adjustment, with a reason | Up or down |
| Count correction | Stocktake result | Up or down |
The rule is simple: nobody changes a quantity by typing over it. If the number is wrong, record an adjustment with a reason. Over a few months the reasons tell you where your losses come from.
How do you receive stock properly?
Check every delivery against your order and the supplier's delivery note before you sign, then record it as a goods received note the same day. Most stock errors start at the back door, not the till.
- Count cases and check product codes, not just the number of boxes.
- Check dates on short-life goods and refuse anything too close to expiry.
- Note shortages and damage on the driver's copy before signing.
- Record what actually arrived, not what was ordered. Chase the difference with the supplier.
- Put new stock behind or under older stock so the older stock sells first.
How do you decide which products need the most attention?
Use ABC analysis. Rank your products by sales value, or by profit, over the last three to twelve months, and split them into three groups. A small number of products almost always makes up most of the value, so they deserve the closest control.
Worked example. A wholesaler with 10 products ranks them by yearly sales:
| Product | Yearly sales | Share | Running share | Class |
|---|---|---|---|---|
| P1 | 42,000 | 35% | 35% | A |
| P2 | 30,000 | 25% | 60% | A |
| P3 | 12,000 | 10% | 70% | B |
| P4 | 10,800 | 9% | 79% | B |
| P5 | 8,400 | 7% | 86% | B |
| P6 | 6,000 | 5% | 91% | C |
| P7 | 4,800 | 4% | 95% | C |
| P8 | 3,000 | 2.5% | 97.5% | C |
| P9 | 1,800 | 1.5% | 99% | C |
| P10 | 1,200 | 1% | 100% | C |
| Total | 120,000 |
Two products bring in 60% of sales. Treat each group differently:
- A lines: count weekly or monthly, review reorder points often, never run out, negotiate hard with suppliers.
- B lines: count monthly or quarterly, standard reorder rules.
- C lines: count less often, order in sensible batches, and ask every year whether each one earns its space.
How do you know when to reorder?
Set a reorder point for each line: the stock level at which you place the next order so it arrives before you run out.
Reorder point = average daily sales × lead time in days + safety stock
If a line sells 20 a day, the supplier takes 7 days, and you keep 60 as safety stock, you reorder when stock falls to 20 × 7 + 60 = 200. The reorder point guide covers how to set safety stock and how much to order, and the reorder point calculator does the sum for you.
How do you know if you are holding too much stock?
Measure stock turn and days of stock. They tell you how fast stock becomes sales again.
Stock turn = cost of goods sold in a year ÷ average stock at cost
Days of stock = 365 ÷ stock turn
Worked example. Your cost of goods sold last year was 600,000 and your average stock at cost was 100,000.
- Stock turn = 600,000 ÷ 100,000 = 6 times a year
- Days of stock = 365 ÷ 6 ≈ 61 days
You hold about two months of stock. If your supplier delivers weekly, that is probably too much. Bringing it down to 45 days with the same sales would mean average stock of about 74,000 (600,000 × 45 ÷ 365), freeing roughly 26,000.
Work this out per product group too. A business average can hide one category with a year's worth of stock. Slow-moving and dead stock are covered in the stock valuation guide.
Where does stock go missing?
Stock loss, often called shrinkage, has a handful of causes, and most are process errors rather than theft. Knowing which one you have tells you what to fix.
| Cause | Typical sign | Fix |
|---|---|---|
| Receiving errors | Shortfalls on lines just delivered | Count deliveries against the delivery note before signing |
| Wrong item scanned or sold | One line short, a similar one over | Scan barcodes; avoid "miscellaneous" keys |
| Unrecorded damage or expiry | Losses on fragile or short-life lines | Record every write-off with a reason as it happens |
| Unit mix-ups | Large errors on case and single lines | Set clear units and pack sizes for each product |
| Transfers not received | Stock vanishes between sites | Record both the sending and the receiving |
| Theft | Small, high-value lines short again and again | Secure storage, regular counts, separate duties |
How often should you count stock?
Count a few lines often instead of everything once a year. Short, regular counts (often called cycle counts) catch errors while people still remember what happened. A full stocktake is still needed for your year-end accounts.
A simple schedule:
- Weekly: your top 10 to 20 A lines, plus any line with a recent difference.
- Monthly: all A lines and a rotating set of B lines.
- Quarterly: all B lines and a rotating set of C lines.
- Yearly: everything, at the financial year end.
Count without looking at the system figure first, then compare. The stocktake guide covers how to prepare, count and post the results.
How do you manage dates and expiry?
Sell the oldest stock first, which is called first in, first out, or by earliest expiry where dates matter. Put new deliveries behind existing stock, check dates on short-life lines weekly, and mark down goods early enough that they still sell. A product sold at a small discount a month before its date is better than one written off after it.
What does a weekly stock routine look like?
- Record all deliveries as goods received notes on the day they arrive.
- Record damage, expiry and breakages as adjustments with reasons.
- Count your top A lines and investigate any difference.
- Review the low-stock list and place orders for lines at or below their reorder point.
- Check dates on short-life lines and mark down early.
- Look at the week's adjustments: the same reason twice is a process to fix.
And once a month:
- Value stock at cost and at selling price.
- Check days of stock per category.
- List lines with no sales in 90 days and decide what to do with them.
What are the most common stock control mistakes?
- Typing over quantities instead of recording an adjustment with a reason.
- Treating every product the same, instead of focusing on the A lines.
- Ordering by feel when the supplier rep visits, instead of from reorder points.
- Keeping slow lines "just in case" long after demand has gone.
- Leaving receiving to whoever is free, without checking against the delivery note.
- Waiting for the yearly stocktake to find out about losses.
Questions people ask
What is the difference between stock control and inventory management?
They are often used to mean the same thing. Some people use stock control for the day-to-day tracking of quantities and inventory management for the wider planning of buying, storage and valuation.
How often should a small business count its stock?
Count your most valuable and fastest-moving lines weekly or monthly, and do a full stocktake at least once a year, usually at your financial year end.
What is a good stock turnover?
It depends on what you sell. Fresh food turns many times a month, while hardware or spare parts may turn only a few times a year. Compare yourself with your own past figures and your product type.
Can I do stock control in a spreadsheet?
For a small range in one location, yes, for a while. It becomes unreliable once several people sell, receive and move stock every day, because the sheet is only as current as the last person who updated it.
