How to do a stock count and find the gap

Why count stock if you already record everything?

Because records drift. An unrecorded bit of waste, a forgotten sale, a purchase entered in pieces instead of kilos: each one is small, but over the weeks they add up and the stock in your records moves away from the stock on your shelves.

A stock count, or stocktake, is counting what's really on the shelves and in the storeroom and comparing it with what your records say should be there. The point isn't the counting itself; it's finding the gap and understanding why it's there.

In a shop that never counts, stock numbers can't be trusted, and you can't order from numbers you don't trust. Working out how many days the olive oil will last at a grocer starts with knowing how many bottles are really on the shelf. How recording and counting work together is covered in small business stock tracking.

When and how often should you count stock?

Count important items weekly and everything monthly. An important item is one that's expensive, sells fast, spoils quickly or goes missing easily.

• Weekly: high-value or fast-moving items like coffee beans, meat, cheese, olive oil and linen.
• Monthly: everything, including slow, cheap items like boxes, labels, spices and thread.
• Straight away: just the one item, when you notice something unexpected or don't trust its numbers.

You don't have to count everything on the same day. Split the shop into areas and count them in turn: the fridge on Monday, the dry store on Thursday, the display and counter on the last Sunday of the month. By the end of the month every area has been counted at least once, and you never have to close for hours.

How do you do a stock count?

In short: count while the shop is closed, after entering every record up to that moment, in the same order every time and in the units your records use. In seven steps:

1. 1Pick the timeBefore opening or after closing, when nothing on the shelves is changing.
2. 2Bring your records up to dateEnter every purchase, batch, sale and bit of waste up to now; if a receipt is missing, find it now.
3. 3Write the list in shelf orderList items in the order they sit on the shelves, in the units your records use.
4. 4Count and write it down at onceOne person counts, the other writes. Weigh or measure open packs; don't rely on memory.
5. 5Work out the gap and its valueSubtract the expected quantity from what you counted, then multiply by the average unit cost. If a gap is big, count that item once more.
6. 6Find the reason and note itWaste, unit, sales, portions or loss? Write the reason and what you'll do about it next to the gap.
7. 7Set the records to the countFrom here on, stock and days-left figures start from what you counted.

What should you watch out for while counting?

Five things decide whether the gap you find is real: the time, the order, the unit, open packs, and who does the counting.

Count before opening or after closing

A shelf counted while customers are buying changes before you finish. At the moment of the count, the records and the shelf should show the same moment. Enter all purchases, sales and waste up to that point before you start; don't enter sales while you're counting, and enter later sales once the count is done.

Count in the same order every time

Start at the door, go clockwise, top shelf to bottom. Write the count sheet in the same order. A fixed route stops you skipping an item or counting it twice, and makes the next count faster.

Count in the units your records use

If your records keep flour in kilos, count it in kilos, not sacks. If buttons are kept by the piece, write pieces, not packs. Mix units and the gap means nothing: write “2” for two 50 kg sacks of flour against 100 kg in your records, and it shows 98 kg missing.

Deal with open packs separately

Don't count an opened sack of flour, a half-used bottle of syrup or a cut bolt of fabric as full. Weigh what you can, measure what you can; in a textile studio, measuring a bolt with a tape takes five minutes but catches a half-metre gap. What you can't weigh, write as a half or a quarter: 0.5 L, 0.25 kg.

Do big counts in pairs

One counts, one writes. For expensive items, swap and count again; if the two counts don't match, do a third one together.

How do you set up a stock count sheet?

A count sheet has columns for the item, the unit and the counted quantity, plus the expected quantity, the gap and its value to fill in afterwards. Write it in shelf order.

• Item: in the order it sits on the shelf.
• Unit: the same as in your records: kg, L, m, pieces.
• Counted: filled in during the count.
• Expected: taken from your records once the count is done.
• Gap and value: worked out last.

Three lines from a textile studio's end-of-month count:

Canvas has an average cost of ₺250.00 per metre, so half a metre is ₺125.00; a box costs ₺5.00, so two are ₺10.00. The dye shows no gap, which tells you its records are being kept properly.

How do you calculate the count gap?

Subtract what your records say should be there from what you counted; the value is that gap multiplied by the average unit cost. A minus result means stock is missing, a plus means there's more than expected.

Why average cost? Because stock bought at different prices sits mixed together on the shelf, and you can't tell which purchase the missing part came from. The average gives a fair figure in between.

250 g of coffee is 125 cups with 2 g too much in each. In a busy café, that builds up in a day or two if an espresso written as 18 g in the recipe is ground at 20 g behind the counter.

Why do count gaps happen, and what do you do about each?

Count gaps usually come down to five reasons: unrecorded waste, the wrong unit, unrecorded sales, over-portioning, and theft or loss. How big the gap is and which item it's on often gives the reason away.

In a restaurant, if meat, cheese or rice used in recipes comes up short by a similar amount at every count, look at portions first. If the shortfall is kitchen waste nobody wrote down, the ways to cut it are in how to calculate waste.

What does it mean when a count comes out higher?

A plus gap means there's more on the shelf than your records say, and it's often a purchase that never got entered. It matters as much as a shortfall, because a missing purchase makes both your stock and your costs wrong.

In a café, your records say there should be 4 L of oat milk and you count 6 L on the shelf: a gap of +2 L. At an average ₺90.00 per litre, that's +₺180.00. Most likely someone picked up 2 L from the shop next door and didn't record it. Find the receipt and enter the purchase before you save the count; enter it afterwards and the 2 L gets added to stock twice.

A plus gap can have other causes too: a customer return that wasn't entered, a sale entered twice, or a shelf missed in the previous count.

What happens to your records after a count?

After the count, your records are set to what you counted, and every calculation from then on starts from that number. The gap itself isn't erased; it stays on record as a loss, with its value.

Both halves matter. If stock isn't set to the count, you see the same gap again every month; if the gap isn't kept, you never see the loss. The right order: count, read the gap, note the reason, set the records to the count. If the same item comes up short at the next count, your note shows whether it's the same reason again.

Figures like how many days stock will last get fixed by a count too. If the records show 4 L of oat milk but there are really 6 L, the running-low warning comes too early; after the count, the number is real again.