Stock tracking for a small business: notebook, spreadsheet or app

What is stock tracking, and what exactly do you track?

Stock tracking is writing down what comes into the shop, what goes out and what gets lost, and counting now and then, so you always know what's on hand. However many products you have, you're tracking the same four movements.

• In: purchases. A box from the wholesaler, a bolt of fabric from the supplier, vegetables from the market.
• Out: sales, or what goes into production. A bottle sold off the shelf, the clay used in a batch, the milk poured into a cup.
• Waste: what leaves without being sold. Spoiled, broken, past its date, offcuts.
• Check: the count. Looking at what's really on the shelf and comparing it with the records.

The first three change your stock. A count doesn't; it shows whether the sum is right. So all of stock tracking fits on one line:

How do you work out stock? A one-week example

Take what you had at the start of the week, add what came in, subtract what was used and wasted, then compare the result with what you count on the shelf. Let's follow the clay in a pottery workshop for one week.

The clay costs ₺1,750.00 ÷ 25 = ₺70.00 per kg. One kilo sounds like nothing, but if it happens every week it passes fifty kilos a year, or more than ₺3,500. To find where the gap came from, check the records first: was the thrown-away clay written down, were the test pieces entered as a batch? More often than not, the gap comes from a record nobody wrote rather than from missing goods. The same logic runs a workshop's material and product costs, and we cover counting quickly and regularly in how to do a stock count.

Should you track stock in a notebook, a spreadsheet or an app?

All three work; the difference is how long an entry takes, who catches the mistakes and who does the sums. With a few items and no staff, a notebook is enough. Once you want a team, costs and alerts, the work you do by hand grows fast.

A spreadsheet's sneakiest risk is silent breakage: you add a row below the total, the formula doesn't include it, and nobody notices. A notebook's risk is tiredness; a sum done at eight in the evening is never as careful as one done in the morning. An app cuts out the arithmetic mistakes but raises a new question: which app? We put together 10 questions to ask when choosing a stock and cost app for exactly that.

How many days will your stock last?

Divide what you have by your average daily use. The answer is how many days you can keep going if nothing new comes in.

Take coffee beans in a café. Over the last 7 open days, 8.4 kg of beans went: 8.4 ÷ 7 = 1.2 kg a day on average. There are 4.8 kg in the storeroom: 4.8 ÷ 1.2 = 4 days. On its own that number says little; the real question is how many days your supplier takes to deliver.

Averages can mislead. In a café that sells twice as much at the weekend, “4 days left” on a Friday evening can mean empty by Sunday lunchtime. If your busy days stand out, think about them separately.

How do you calculate the reorder point?

Multiply your average daily use by the supplier's lead time, then add a safety buffer. On the day stock drops to that level you place the order; what you have lasts until the delivery, and the buffer covers an unexpected rush.

With 26 bottles on the shelf and in the back, you have 26 ÷ 4 = 6.5 days. When stock drops to 20, a day and a half from now, you order. By the time the wholesaler arrives three days later, 12 bottles have sold and 8 are still there. Stock tracking for a grocer starts with a number this simple.

The same sum works in any shop; only the unit changes:

The café's 4.8 kg of beans will be down to 3.6 kg in a day, so the order goes in tomorrow. Thread in a textile studio is more interesting: with 9 spools on hand, 9 ÷ 3 = 3 days left, but the supplier takes 5 days. That order is already late.

How do you start tracking stock?

Start with the 20 items that matter most, not with everything. Even with hundreds of products, the money and the trouble usually sit with a small number of them; sort those out first.

Which 20? Any item that gets a “yes” to at least one of these four questions:

• Which one ties up the most money on the shelf?
• Which one runs out most often, and stops work when it does?
• Which one is wasted the most?
• Which one changes price most often?

For a grocer that might be olive oil, cheese, milk and detergent; for a café, beans, milk, oat milk and cups; for a tailoring workshop, fabric, thread, zippers and buttons.

1. 1Pick your 20 itemsUse the four questions above to make your list. Settle each item's name and unit (kg, L, pieces, metres, spools) once.
2. 2Do an opening countCount what you have of each item once and write it down. Every sum starts from this number; start from a guess and your first count gap is your own mistake.
3. 3Record purchases when goods arriveWith the delivery note or receipt in hand, enter the quantity and the total you paid. A purchase left for later gets forgotten, and your stock looks short.
4. 4Let whoever does the job record itWhoever is at the counter records the sale, whoever throws something out records the waste, whoever makes the batch records it. Information gets lost as it passes from hand to hand; a record made on the spot doesn't.
5. 5Take five minutes at closingBefore you lock up, look over the day's records: was the delivery entered, was the waste written down? A forgotten record is easiest to remember the same day.
6. 6Do a quick count once a weekNot all 20 items, just the most expensive and the fastest-moving. If there's a gap, look for the reason that same week.

Who should record stock when you have a team?

Whoever has the goods in their hands at that moment. The owner's job isn't to write everything down from memory at night; it's to check the records and look at count gaps.

A single notebook doesn't work for a team; the records are wherever the book is. With a shared book on everyone's phone, each person writes down their own work and you look at it all in one place in the evening. There's one more catch: you may not want staff to see the till, the profit or what you pay for goods. That's when a role that can enter quantities but can't see money is worth having.

What happens to stock records when the internet drops?

In a notebook, nothing. Some cloud spreadsheets and online-only programs can't take an entry without a connection, so the record waits in someone's head or gets forgotten. If the signal is weak in your storeroom, basement, market stall or at a fair, it matters whether your tool takes records offline.

The rule is simple: a record shouldn't have to wait for a connection. A purchase that can't be entered when the goods arrive may not be remembered in the evening.