What is a Stocktake? How to Do and Why Is It Important?
Have you ever ordered something online and received a “sorry, sold out” email? Those problems often come from poor stocktake practices. Research shows 21% of consumers lose trust in a brand after a late delivery, and 23% refuse to buy again. A solid stocktake prevents these costly mistakes, making stocktake essential for every retailer, wholesaler, and e-commerce brand. What Is Stocktake? A stocktake is when a business counts everything in stock, from products on shelves to items in warehouses. Companies do this to ensure their system numbers match what they actually have. This process helps find missing, damaged, or extra items and keeps records accurate. Regular stocktakes make it easier to plan orders, avoid running out of popular items, and keep businesses running well. Stocktake Definition and Meaning in Retail In retail and wholesale supply chains, stocktake means the systematic physical count and verification of every product (SKU) in a location. Accurate counts create reliable financial statements, loss-prevention programs, and customer-friendly order fulfillment. Quick fact: If your trading stock value changes by ≤ A$5,000 across a financial year, the Australian Taxation Office’s simplified stock rules let many small businesses skip formal stocktakes and save time. Why Stocktake Matters for Every Business Financial Accuracy Updated counts keep your balance sheet inventory from being over or understated. Loss Prevention Regular checks highlight shrinkage (theft, damage, picking errors) early. Better Decision Making Knowing exact stock levels prevents over-buying and stock-outs. Legal Compliance The ATO and auditors require verifiable inventory records. Fines cost more than a day of counting. Better Operations Reliable data lets your warehouse management system route pickers, replenish stock locations, and forecast demand without guesswork. How Stocktake Works At its core, stocktake compares system quantity with physical quantity and fixes any differences. The process follows five steps: How to Do Stocktake: Step-by-Step Guide Step 1: Choose the Right Time Pick a quiet day or time with less activity. Tell your team in advance so everyone prepares. Gather what you need: pens, clipboards, scanners, or your inventory app. Step 2: Organize Everything Clean shelves, group similar items together, and make sure everything has labels. Good preparation saves time during counting. Step 3: Stop Stock Movement Put a temporary stop on sales, returns, or deliveries while you count. This keeps numbers from changing during stocktake. Step 4: Count Everything Go through each item carefully and write down quantities. Pay extra attention to items that sell fast or cost more. Step 5: Check Against Records Compare what you counted with what’s in your system. If there’s a difference, investigate—items might be misplaced, damaged, or missing. Step 6: Finish Up Share results with your team or manager and note any changes needed for ordering, storage, or security. You can download a stocktake template from Microsoft to help organize your counts. Stocktaking Methods: Periodic vs Perpetual Method Best For Pros Cons Periodic stocktake (monthly/quarterly/annual) Low-SKU boutiques, cafés Cheap; no tech needed Must pause operations; data can go stale Perpetual stocktake (real-time) High-volume e-commerce, 3PLs Always accurate; minimal shutdowns Needs scanners, integrated systems, and staff discipline For more depth on the perpetual approach, see Investopedia’s guide to the perpetual inventory system. Benefits of Stocktake Doing a stocktake might feel like a big job, but the benefits make the effort worthwhile. Stocktake isn’t just about counting boxes—it’s about keeping your business in control and running well. Keeps Records Real Systems can say one thing, but what’s on your shelves might tell a different story. Stocktake helps you match the two so you know exactly what’s in your warehouse or shop. Smarter Buying Decisions When you know what’s in stock, you can avoid panic orders or buying more than you need. That means less waste and better use of your budget. Spots Problems Early Missing items? Damaged goods? Numbers that don’t add up? Stocktake shines a light on these issues before they grow into bigger, costlier problems. Protects Your Cash Every item on your shelves represents money. By keeping the right amount of stock, you stop cash from being tied up in products that just collect dust. Keeps Customers Happy When stock records are accurate, you can deliver orders on time and avoid disappointing customers with “out of stock” messages. Helps with Reports and Audits If you need to provide figures for accounting or tax purposes, stocktake gives you up-to-date, reliable data without guesswork. Risks of Performing Stocktake Stocktake is an important part of running a business, but the process can bring its own challenges if you’re not prepared. Think of stocktake as a necessary task—valuable in the long run, but a little tricky in the moment. Operations Slow Down To count everything properly, you often need to pause sales, deliveries, and returns. If this happens during a busy period, customers might get annoyed or face delays. Mistakes Happen No matter how careful you are, people can miscount, skip items, or record numbers wrong—especially if stock isn’t well organized. Takes Time and Money Stocktake can be a big job, sometimes needing extra staff or overtime hours. That means extra costs on top of the time needed to get the job done. Physical Demands In a big warehouse or store, you might be lifting, moving, and bending for hours. Without proper care, that can be exhausting or even cause injuries. New Errors Can Appear If final numbers aren’t entered into the system correctly, your records might end up less accurate than before you started. Security Risks When products are being handled and moved around, there’s a small window where items can go missing if things aren’t closely watched. Stocktake Sales & Retail Events In Australia, a stocktake sale is the clearance event that follows End of Financial Year (EOFY) on June 30—shoppers love the bargains, accountants love a fresh ledger. The ABC offers a helpful explainer on why EOFY is peak discount season. When Do Stocktake Sales Start? Most national chains open their stocktake sales in late May or early June, peaking in the first week of July. Myer