How to do a stock count without closing the shop

A stock count, sometimes called a stocktake, is simple: you count what is on the shelves and in the back, and compare it with what your records say. Where the two disagree, you work out why and correct the record.

It is the one task that keeps every other number honest. Your list of stock is built from sales, deliveries and adjustments, and every one of those is entered by a person. People forget things, make typing slips, and give out freebies. A count catches the drift before it grows into a problem.

Counting gives you more than correct numbers. It shows you what has been quietly leaving the shop, which products are gathering dust, and what is about to expire. A shop owner who counts regularly knows the stockroom in a way that no report can replace.

The common reason owners avoid it is time. A big count feels like closing for a day and losing sales. The good news is that you do not have to count everything at once, and you do not have to close.

There are two ways to count, and most shops do well with both.

When a full count makes sense

Do a full count when you first start tracking stock, when you move from a notebook to software, when you take over a shop, and once or twice a year for your accounts. It gives you a trusted starting number for every product. If you are moving from paper, the notebook to software guide shows where it fits.

When a cycle count is better

For everything in between, count a slice at a time. Cycle counting means you are always checking something, so a problem is found within days and not months. It is also far easier to fit into a working day, because nobody needs to stop serving.

A sensible rotation focuses effort where it matters most.

• Fast sellers and high-value items: count weekly. They change quickly, and mistakes cost the most.
• Medium sellers: count monthly.
• Slow sellers: count every two or three months. Not much happens to them, so not much goes wrong.
• Anything that has just had a problem: count right away. A product that came up short last week is worth another look.

Ten minutes of preparation saves an hour of confusion. Whatever kind of count you are doing, set these up first.

1. Record all stock movements first

   Enter every delivery that has arrived and every sale or return that has happened. If your list is behind, the count will show differences that are not real. This is the step people skip most often.

2. Decide what you are counting

   A full shop, one aisle, or the top 20 products. Write it down so nobody wonders whether the back room is included.

3. Prepare a count sheet

   A page with the product name and a blank column for the number you count. Do not print the expected quantity next to it, because people tend to write down what they expect to see. The printable stock count sheet gives you a ready-made layout.

4. Tidy as you go

   Face the products, group duplicates, and move stray items back to their right place. Counting from a tidy shelf is quicker and far less error-prone.

5. Choose who counts

   Ideally two people: one counts and calls out the number, the other writes it. The person who normally orders the stock is the worst choice to count it alone, because they have a stake in the answer.

The simple secret is to count in small areas, one at a time, and to deal with sales that happen during the count. Here is a method that works at a normal counter.

Divide the shop into sections

Split the shop into areas small enough to finish in 15 to 20 minutes: one shelf bay, a fridge, the front counter display, a back room rack. Number them. Only one section is being counted at a time, so the rest of the shop carries on as normal.

Count each section completely before moving on

Do not wander between sections. Finish bay 1, write its numbers, then start bay 2. Half-counted sections are where mistakes hide. Count the shelf and any stock stored behind or below it, and note the section on your sheet.

Handle sales made during the count

This is the part that worries people. If someone buys a product while you are counting it, the shelf number changes under your hands. There are three ways to handle it.

• Count quiet times. Early morning, mid-afternoon lulls or just before closing. Most sales happen at peaks, so a quiet window barely disturbs the shelf.
• Set aside items already sold. If a customer is at the till with a product from the section you are counting, count it as sold, or hold it until the sale is done. Do not count it twice.
• Compare against the list at the moment you counted. A sale rung up after you counted a product changes both the shelf and the list, so it does not create a false difference. A sale rung up before you counted but not yet entered does. Enter sales as they happen, and compare each section to the list as it stood when you finished counting it.

Keep deliveries out of the way

Do not count a section while a delivery is being put away in it. If a delivery arrives mid-count, leave the boxes unopened to one side, and record them as received after the section is done. Otherwise, you cannot tell whether a number includes the new stock.

A small shop does a cycle count of one bay on a quiet Tuesday afternoon. The bay holds six products. The list is checked against the shelf.

Four of six are exactly right, which is a good sign. Three products differ: oil is short by 2, beans by 3, and soap is over by 1. Net, the shelf is $6.60 lighter than the list says (that is -$6.00, -$2.70 and +$2.10).

What to do with the differences

1. Recount before you correct. Recount the three products that differ. Many differences vanish on a second look: a case behind another case, or a packet on the wrong shelf.
2. Look for a cause. Oil short by 2: a damaged bottle not recorded? Soap over by 1: a sale entered under the wrong product, or a return not recorded? Beans short by 3: maybe the beans were in the sale last week and ended up under a similar name.
3. Correct the record. Once you are happy the count is right, change the list to match the shelf, with the reason: damaged, lost, miscount.
4. Keep a note of the pattern. Write down the differences. If oil is short every month, you now have something to investigate.

The soap is worth a closer look. An overage is as much a clue as a shortage. If you have one extra soap, someone else has one fewer of something similar. Check whether a similar product was rung up by mistake. If the beans and the soap are both off, perhaps a customer was charged for the wrong item.

A small number of differences is normal and nothing to worry about. A pattern is what matters. Here are the common causes, roughly in order of how often they turn up.

• Unrecorded deliveries or short deliveries. More came, or fewer came, than the list expects.
• Sales entered against the wrong product. Similar names, similar sizes.
• Damaged or expired stock removed but not written down.
• Returns that were refunded but never put back on the list.
• Stock moved to another place. A case in the back room, a display, someone's car.
• Miscounts. Especially for items in bundles, cases or overlapping stacks.
• Theft or giveaways. Possible, but it should be the last explanation, not the first. Rule out the ordinary causes first.

How big a difference is worth chasing? Think in money and in frequency. A bag of rice off by one once is a shrug. The same product off every month, or a high-value product off at all, is worth an hour. Reducing stock loss goes further on tracing what is going missing.

Counting with the expected number in front of you

If you can see that the list says 18, you will tend to count 18. Count blind, and compare afterwards.

Not updating the list first

A pile of unrecorded sales or deliveries turns a count into a mess of false differences. Catch up on the paperwork before you start.

Forgetting the back room, fridge or storage

A product with 4 on the shelf and 20 in storage looks nearly out. Count wherever stock lives, and record the total.

Counting everything once a year and nothing else

By the time of the annual count, a year of drift has piled up and nobody can say why. Small, regular counts keep the problem small.

Fixing the number without finding the reason

Overwriting the list makes the difference disappear, and with it the clue. Always write down why.

Counting when you are rushed

A hurried count produces errors you then spend longer finding. Pick a time you can give it your attention, even if it is only 15 minutes.

Counting in different units

One person counts cases and another counts single items. Agree on the unit for each product and write it on the sheet.

• Enter all deliveries, sales and returns so the list is up to date.
• Choose what you are counting: a full count, or one slice for a cycle count.
• Print or prepare a count sheet without the expected numbers on it.
• Pick a quiet window, and number the shop's sections.
• Tidy and face products as you go.
• Have one person count and one person record, if you can.
• Count each section completely before moving to the next.
• Check the shelf, the back room, the fridge and any display.
• Hold sold items and unopened deliveries aside while you count.
• Recount every product that differs before you correct anything.
• Update the list, with a reason for every change.
• Note any repeat differences, and plan the next slice to count.

Shopkeepa is built to make counting something you can fit into a normal day. A rapid stock count mode lets you work through products quickly: enter the number you see, and any difference is recorded as a count adjustment, so you can look back at it later alongside deliveries, returns and damaged stock.

Because every change to stock is kept as its own record, you can see exactly what happened between one count and the next, which is a lot easier than guessing. Read more about inventory tracking. Shopkeepa is in development, and early access shops will help shape it.