In hypermarkets, supermarkets, grocery stores, retail shops, etc. Everyone knows that there is a huge amount of inventory available for customers to purchase. It is important to keep track of inventory and goods available belonging to good quality. Most importantly inventory is sold while it is in good condition and valid as well. However, it becomes hectic and labor-intensive because these places are inventory intensive. This is where stocktaking and stock checking come into play. What exactly are they, that we will cover in this blog. So, let us begin.
What Is Stocktaking?
Stocktaking is also known as stock counting. It is a manual process in which inventory is counted in the course of physically checking the records of all the stock that your business presently has available.
A vital part of your business Influences your stock administration, deals, and purchase. Stock counting enables organizations to keep track of their inventory and helps them in better stock management.
Stock counting is nothing but physical inventory available and you manage inventory levels with stocktaking. It is crucial as it affects purchasing, production, and sales processes as well.
What Is Stock Checking?
When stock levels are enough to meet the customer’s demand, that is stock checking. Basically, it is a systematic approach to checking the inventory quantity.
This aids in the decision-making of the organization as the specialists can comprehend on the off chance that the stock that they at present have available will actually want to meet the necessary production and the resultant outcome will satisfy the need and fulfillment of the clients.
Recommend To Read: Described Inventory Forecasting Tools and Methods for Optimizing Inventory Process.
What Are the Major Differences Between Stocktaking & Stock Checking?
Below we have discussed the differences between stocktaking & stock checking:
1. Stocktaking is the process of checking quality and checking the condition of inventory physically whereas stock checking is the process of maintaining appropriate stock quantity to meet the needs of the customer.
2. The objective of stocktaking is to inspect the stock and stock checking’s objective is to meet customer's demand and ensure adequate stock availability.
3. Stocktaking is a manual process whereas stock checking is a strategic approach and is done automatically.
4. This process can be done weekly or monthly as per the organization’s requirements in stocktaking whereas stock checking is a continuous process.
What Are the Methods of Stock Checking?
Stock checking methods are discussed below:
1. Checking Stock Level
In order to maintain the right level of inventory, it is important to understand how much time inventory will be consumed so that before that inventory can be refilled.
It will be helpful in inventory forecasting revenue generation and inventory consumption as well.
2. ABC Analysis
In the ABC analysis method, the stock is sorted into 3 classes A, B, and C. Class A stock comprises which is costly and quantity-wise less.
In the B class stock is incorporated, which is not so expensive but rather more in quantity, and in the C class stock is prudent and too much in quantity.
A class is extremely basic, and it should be dealt with appropriately otherwise it can influence the bottom line! Class A items are sold less but provide great profit. It is similar to the 80/20 rule.
3. Data Utilization
Admittance to information and examination helps with ascertaining and anticipating accurate projections about your sales. Analytics gives you the ability to see the overall view of your inventory. Similarly, as make changes and acclimation to the improvise numbers.
The upsides of this can be tracked down to the improved efficiency and all-around advantage of your business. Associations comprehend the more induction to data they have, the greater accomplishment they can achieve.
You can utilize investigation to anticipate the interest of the market. It will be helpful in better stock checking management.
4. Utilize Inventory Management Software
For stock checking, an organization can utilize inventory management software it will resolve all the issues related to inventory along with stock checking. It simplifies and automates the process of inventory management, so it becomes an easy process as it provides a complete view of inventory.
This software also alerts teams and notifies them whenever inventory is low, and it gives a real-time view of inventory availability.
The inventory management software market size is huge as lots of organizations are using it.
According to Global Market Insights, “Inventory Management Software Market size crossed USD 3 billion in 2019 and is estimated to grow at a CAGR of over 5% from 2020 to 2026.”
When inventory is an essential part of your business then one cannot rely on manual processes. It will only hinder your business and inefficiency will increase. That is why organizations must utilize inventory management software it will give your business several benefits along with stocktaking.
With this software, you can avoid several major inventory management issues such as overstocking and out-of-stock issues. Inventory management software enables you to set a re-order level and you can easily avoid out-of-stock issues. Other than that, it will give an alert for each item’s expiration date.
Frequently Asked Questions (FAQs)
Q.1 - What Is the 80/20 Rule?
80 percent of the profit is generated by 20 percent of sales and the rest of the profit comes from 80 percent of sales. It is also known as Pareto’s rule.
Q.2 - What Is a Stock?
Stock refers to anything from raw materials such as automobile parts, spare parts, clothing, concrete, and household items to finished products available for sale to consumers.
Q.3 - Why Are Out-Of-Stock and Overstocking Considered Major Inventory Management Issues?
Out-of-stock and overstocking are considered major inventory management issues because they can be dangerous for business. As organizations can suffer from great loss due to these issues and their profitability can decrease, in fact, several times businesses are corrupt due to these issues.