Why Should Every Business Periodically Perform Stock-Taking?

The value of stock-taking is clear for every business owner. It lets you frequently check and boost gross profit while decreasing loss, enhancing allowance control, and cutting back on waste. When you combine stock-taking with reconciling inventory records, you get a practice named inventory reconciliation

Inventory reconciliation compares physical inventory data to the company’s inventory accounting record (Book value). In other words, your organization’s information about your stockpiles must correspond to the goods you have on hand.

Of course, things are more complex and time-consuming than you may think, but it is a necessary process for every business, big or small, and thankfully, there are strategies that you can use to be more effective. 

Trends keep changing every season. Therefore, you must check your stocks periodically to avoid incurring losses. This can help you determine which stocks are loose ends or whether there are any gaps. A good inventory reconciliation strategy can help you develop a better sales strategy and bring you closer to our business goals.

In the following paragraphs, we’ll outline a few reasons you should take regular inventory seriously.

Improved Warehouse Productivity And Organization

A successful inventory management plan also results in a well-organized fulfillment facility. Future and current fulfillment plans are more effective when the warehouse is organized.

It takes less time and money to handle inventory when effective inventory management is in place, freeing up resources for other uses.

The entire warehouse will be more productive and organized if you always know what products you have in stock and where they are. This is because you will only spend time searching through the shelves for items that you may or may not have in stock when a need arises or when you have a large order.

It Helps Achieve Business Goals

Stock-taking operations can help find potential discrepancies that might affect your business plan. Any issues with your inventory can take us one step further from making a profit. If anything, these drawbacks will only cause you to experience loss. 

Usually, these gaps are found by the end of the fiscal year. When you perform stock-taking regularly (i.e., quarterly or bi-annually), you will get insights ahead of time. When that moment hits, you will likely need more time to make adjustments. When you perform stock-taking regularly (i.e., quarterly or bi-annually), you will get insights ahead of time. 

If our current business plan is not working, you will have the opportunity to change it. This will help you reach your goals faster.

Centralized view of stocks

A periodical inventory will provide a centralized view of stock across all sales channels, including how much is in stock and where. This way, you can be more organized and meet your customers’ needs faster. 

Additionally, it will enable warehouse management by allowing inventory to be allocated to specific sales channels, which is crucial if you have warehouses and distribution centers spread out across several locations.

Also, you can be sure of which products are your most desired ones if you constantly know what stocks you have. As a result, you will continuously be aware of which products to concentrate on and which ones can be ignored because there is insufficient demand for them.

Minimize the risk of theft

As business owners, we hope theft will never be an issue. That being said, if we have a bigger business in industries such as retail, theft is usually a common problem. It may be impossible to stop it, especially when the culprits have learned to be crafty about it.

Periodic stock-taking will help determine whether we have a potential theft issue to deal with. For example, if we are doing monthly checks and see that stocks are constantly missing, we should take measures. 

Perhaps we can do an upgrade to our security system. Or maybe we need to change personnel: be more selective about the people we let inside. These measures may help us prevent our employees from being unlawful.

Aside from the damage, we may also use stock-taking for damage control. If there are any reasons why damage frequently occurs, the process will help fix the issue. This way, we will make sure that it does not happen again in the future. 

It Identifies What’s Performing and What’s Not

By performing regular stock-taking, you can see exactly which stocks are trending and which aren’t. This will make it easier for you to invest in the right product/s and push the wrong ones aside.

For example, let’s say you are investing in a product that turned out to be a dead end. By doing inventory reconciliation, you can determine whether a flash sale of our stocks is needed or not. This can help you shift the stocks around and perhaps make some profit through strategy change.

This often means you will sell our stocks at a lower margin, bringing us less profit. Even so, it is a much better alternative than letting those stocks sit, gather dust, and potentially cause losses.

Once you determine which stocks are not working, you can develop a better investment strategy and perhaps take that product off our line. One good idea would be to take our slow-moving products and put them in a specific area of our warehouse. This way, you can see how well they are performing by looking at the gathering dust.

Another option would be to use our inventory management app to categorize your inventory. This way, you can get a clear image of our products and the parts that people have not interacted much with. Our mobile app is easier to keep track of on the go.

It Helps with Purchase Planning

As we have mentioned, inventory reconciliation helps you determine what’s popular and what’s not. If there is a shortage of a particular product from your inventory, the demand for it is high, or we need more for various reasons.

For instance, let’s say that we own a shoe store and purchase shoes of all sizes in bulk. We expect all shoes to be gone by the end of the season, but we notice a constant shortage in specific sizes. This will let us know that we need to order more sizes in the future. 

Stock-taking can also help with emergency orders. For example, you may be convinced that you have an adequate supply of shoes for the season. Inventory reconciliation will notify you if the shoes are stolen or damaged. It will help you plan a new purchase ahead of time.

It Reviews Pricing for Your Sales Strategy

Prices can change a lot over time, and a product we purchase at the moment may have a different value in the future. If those products remain unsold by the end of the season, you risk having to sell them at a different price than you originally had in mind.

Stock-taking can make you aware of these price modifications. For example, if you use your inventory management app, you should be able to compare past prices to the current ones. The data is extremely useful because it helps you come up with a better sales strategy.


The needs of clients and the control you will have over your items are the primary drivers behind the necessity of regularly conducting stock-taking activities.

This article shows several advantages to regularly checking your inventory, including cost savings, theft prevention, and ensuring that your consumers receive the goods they desire without having to deal with delays. Understanding the products that customers want the most will help you better predict demand and avoid stockouts.

These routine operations must be in place, regardless of how big or small the business is. They typically occur once a year, and no matter the size of the company, the benefits are the same. 
Our inventory management app will even take you one step further. The accurate information will inform you whether we are on the right track or if you need to make any changes.

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