Inventory count
- Variance in units (negative is a shortfall)
- -86
- What the shortfall cost you to replace
- $1,075
- Count accuracy, percent of expected found
- 96.4
The arithmetic on these sheets is your own count: units, unit cost and reorder point in, variance and value out. Nothing is estimated and no industry average is applied to your numbers. Where a page states an outside figure it names the document it came from and links to it.
An inventory count is a walk, not a report. Somebody goes to the shelf, looks at what is on it, writes down what they see, and only afterwards does anyone compare that with what the record claimed. Almost every count that produces a useless number got that order wrong: the counter carried a printout, ticked what matched, and recorded the system's opinion back to itself. This page is about running the walk so the number at the end means something, and about what to do with the gap it finds.
Open the Inventory spreadsheet template Free to use. No account, no card, no trial clock.
Decide what a line is before anybody walks
A line is the thing you will count as one unit, and the decision is arbitrary until you make it and then it is binding. A box of a hundred is one line or a hundred lines; a part on the shelf and the same part on a van are one line or two. Write the rule down. A count whose line definition changed halfway through is measuring itself.
Walk without the expected figure in front of you
Give the counter a sheet with locations and part numbers and no quantities. This is the single change that most improves a small business count, and it costs nothing. What the record expected is entered afterwards, by somebody else if you can manage it, and the disagreement is the output.
Freeze movement, or record it
Nothing should leave the shelf during the walk. If that is impossible, and in a workshop it usually is, stage the pulls on a bench and add them at the end. A count taken while stock is moving has a variance that includes the movement, which is the most common reason a first count looks alarming.
Enter expected, counted and cost, and read the four figures out
Expected against counted gives variance in units; variance at your own unit cost gives what the gap costs to replace; counted over expected gives accuracy; and lines times minutes gives what the walk costs you in time. Those four are the whole count, and the sheet on this page works all of them from your own entries.
Decide what the number changes before you count again
A variance you do not act on is a number you will produce again next quarter. Pick one thing: a docket for van pulls, a reorder point you actually respect, a locked cage for the twenty lines that account for most of the value. Then count again and see whether the figure moved, which is the only measurement that matters.
Stock counts: what people ask before the first one
What is a full count and what is a cycle count? A full count stops everything and walks the whole shelf, usually once or twice a year. A cycle count walks a slice of it on a rota so every line is reached over a period without ever closing down. Small businesses almost always start with a full count to establish the baseline and move to cycles once the baseline is trustworthy.
Do I have to count for tax reasons? It depends on the business. The federal rule on the need for inventories sets out when a business must account for inventories in computing taxable income, and the IRS guidance on accounting methods explains the valuation that follows. If either applies to you, a real count is what the valuation is built on.
The first count found a huge variance. Is something wrong? Usually the record is wrong rather than the shelf, because the record has been accumulating small errors for years and nobody has ever tested it. Treat the first count as the new baseline rather than as an incident, and judge the second one against it.
Will the Inventory count fit what you count?
Tell us what you are counting and how you count it today, and we will tell you whether Stocktaka fits before you pay for anything.