How to Do Store Inventory

A store inventory is a record of all the items available for use in your daily business operations. The store inventory increases with purchases and decreases with sales or consumption. It is important to track changes in your inventory so you can evaluate business performance, set future plans or detect theft. You can do your store inventory on a daily, weekly, monthly, quarterly or annual basis depending on the type and scope of your small business.

Update the book or computer records of your store inventory to account for the inward and outward movement of items from your store. Inward stock movement occurs when you purchase more items or when customers return faulty goods. Sales or issue of items reduces your store inventory. Subtract the total sales or issues of each item from the sum of the opening balance and purchases of each item for the period. This will be your stock position as per your unverified inventory records.

It is appropriate to count your store inventory physically to verify the actual quantity of each item. Set a date and timetable for the stock-take exercise. If your small business operates several stores with large volumes of items, allocate employees to each of the stores to hasten the inventory count. For example, if you maintain different stores for drinks and beverages, food, kitchenware, housekeeping and gift shop items for your hotel and restaurant business, distribute the stock-taking tasks of the different stores among your employees.

Print out a stock-take sheet listing all your store items along with their unique descriptions and closing balances captured in your unverified inventory records. Include three blank columns for the actual quantity and variance.

Count each item in your store while entering their quantities in the actual count column of your stock sheet. After the count, subtract the actual quantity of items from the closing balance of the items in your inventory records. Zero balances confirm correct records, positive balances show overstated inventory, while negative balances reveal understated records. For example, if you have 17 bottles of red wine in your inventory records but 15 bottles of the wine in the actual stock count, your inventory records would be overstated by two bottles. Add back the understated items and subtract the overstated ones to have accurate store records.

Always suspend operations before beginning your inventory count. Taking a stock count concurrently with ongoing operations could jeopardize the process because of movement of items to and from the stores. For more frequent stock counts, such as daily or weekly, perform the activity in the evening after closing or early in the morning before business hours.