9 Common Reasons for Stocktake Discrepancies and How To Resolve Them
The whole reason why stocktake is important is that it reveals discrepancies between inventory records and the number of stock you actually have on hand.
Discovering these issues helps you move your business in a more profitable direction and eliminate anything that may have been attributing to stock loss or incorrect counts. After all of the hard work of completing a physical count, your stocktake is not really complete unless you complete this part of the process.
In this article we’re going to cover the most common reasons for discrepancies and what you can do to resolve them.
What causes stocktake discrepancies?
The following list highlights some of the most common reasons why business owners see discrepancies in their stocktake numbers. Bear in mind that there are many more reasons, which aren’t necessarily listed here, as causes can vary greatly depending on industry and inventory record keeping methods.
- Stock loss due to damage
- Stock is in the incorrect location
- Human error during stocktake process
- Stock loss due to theft
- Stock is labelled with incorrect identification
- Stock mistaken for similar product
- Inbound stock not recorded accurately
- Faulty inventory management software or stocktake equipment
- Incorrect unit of measurement was counted
Resolving your stocktake discrepancies: A checklist
Are you seeing some discrepancies in your numbers? Take a look at this checklist and see if you can resolve them.
- Re-count the stock in question. This should be your first step if numbers aren’t matching up. It could be something as simple as a mistake during the original counting process
- Check if the stock exists in another location. If a large number of items appear to be missing, double check that they aren’t in another part of your storeroom, or maybe a different storeroom altogether. There’s even the chance that you’ve purchased the stock but it has not yet arrived from your supplier
- Make sure the correct unit of measurement was used. Ideally, all people participating in the count should be trained on the procedure. However, there is still a chance that someone may have counted in litres or pounds, instead of boxes or individual units
- Verify that the SKU or product identification number is correct. Though uncommon, it’s not unheard of for products to be labelled with the incorrect SKU, thus upsetting your inventory records. Check that the description in your inventory management system actually matches the product you’re counting. If it doesn’t, you’ve found your problem
- Ensure the product has not been mistaken for a similar product. This is a common error in stocktakes when counting staff may not realise that a variation in size or colour is technically a different product with different identification
- Scan your inventory records for errors. Sometimes a discrepancy can come down to a simple mathematical error
- Confirm that there is no missing paperwork. Sales which have been unaccounted for can often throw off your count. Go in search of any missing paperwork, which may not have been entered into your system yet
- Investigate whether employees or customers have been stealing stock. This is one of the least pleasant steps to tackle, but it’s necessary if you can’t find any other logical reason for loss of stock. Consider implementing tighter security measures in store, such as CCTV cameras or security tags on products.
- Speak to your warehouse/storeroom managers. A slip up in the usual procedure for processing stock may have occurred. Have a chat with your managers to see if there are any kinks in the chain. If so, some staff may need retraining or your entire procedure may need to be revised.
Updating your inventory levels
It’s important to update your inventory records to reflect the results of your physical count, whether you’ve uncovered the reason for the discrepancy or not. This will allow you to view the correct levels of stock going forward, which you can then use to alter your profit margins and financial forecasts.
Do you have any items to add to the checklist?