Beware DIY trap
The modern trend of DIY (do-it-yourself) now extends to all walks of life and professions, and stocktaking is no exception.
This may be fine for home improvements where the amateur can achieve better results than professionals and save money, but this does not always apply to the service industries.
Stocktaking goes beyond the physical act of just counting and listing the stock on hand. It requires expertise in interpreting the final result. The stock count itself is normally the easy part of the job, but can the DIY artist really be totally honest when assessing the stock, or will they be over generous and list slightly more stock than there really is?
Having said this, if the owner or manager is disciplined enough, then a simple stock count should not be beyond them. Having counted and listed all the stock the next task will be to cost and value it. This will entail going back through invoices ensuring that they have the current cost price for every item and that any discounts are correctly applied.
But what do you count the stock on? There is no commercial stocktaking stationery available on the market, so unless you are prepared to invest in sophisticated computer hardware and software it will really be a case of design it yourself.
The dedicated DIY man will not be put off by minor setbacks such as stationery, so having purchased his computer and software he is itching to go. After inputting the stock inventory and printing out the count sheets the stock count can begin.
What if more than a stock-on-hand valuation is required? Most publicans require more information, such as a cash result and full gross profit calculated. Now our DIY man will have to extract full details of all deliveries since the last stocktake and calculate the sales for each stock line. Retail selling prices need to be entered and the sales extended to arrive at the estimated receipts.
Any allowances that need to be made must be calculated at this stage and deducted from the estimated receipts. Also any adjustments need to be calculated for items such as wine sold by the glass or bottle. Once the revenue figures have been entered then finally a result can be arrived at.
But what if the result is not favourable, what do you do? Well, he'll have to re-check all the figure work and this can be very time consuming.
Speaking of time, stocktaking in the average licensed premises takes between three and four hours just to count the stock and extract and input the data.
Processing and checking can add another hour, and if you are using a manual system then these times could easily be doubled. If stocktaking is required monthly can the owner/tenant spare the time?
It is not cheap to set up an in-house stocktaking system and can you ever be sure that the results are accurate?
Therefore, by employing a professional stocktaker the publican frees himself from these problems. The stocktaker will not only produce the stock results, but will also assist in the interpretation of the figures.
