Setting the standard
Alex McGill from Venners looks at the benefits of professional stocktaking
Many people consider stocktaking to be a simple task that almost anyone can do.
Just look at the number of companies who rely on their own staff to carry out this vital function - for so-called peace of mind they decide to go for the cheap alternative.
But preaching about the perils of in-house stocktaking means I run the risk of repeating myself endlessly.
In my last article I dealt with the process of becoming a stocktaker. So what's the next step? You've completed stocktaking training, found your first client and arrived to do your first stock-take. Don't panic. Remember your training and have confidence in the fact that you're a professional.
It's vital to strike the right note. Firstly, dress appropriately in business suit, shirt and tie if you are a man, and a smart outfit if you're a woman. As stocktaking can involve clambering over kegs in cellars and climbing ladders to reach inaccessible places, most of Venners' female stocktakers opt for trousers.
Greeting the owner or manager is a priority and spending a few minutes sharing useful information over a cup of coffee can produce dividends while you carry out simple tasks such as testing spirit strengths and running till reports. Remember to request that all stock movement is stopped until you have completely finished the count.
This can also be a good time to ask your client to remove empty kegs and tidy up.
After coffee, it's time to get on with the job. If part of your remit is to check the cash, this will be your first task, otherwise you are ready to start the count. Make sure your client accompanies you or at least shows you where all the stock is kept. While checking cash, never allow yourself to be left alone in the office as this could leave you open to allegations which could incriminate you if cash goes missing.
Logic and accountability
Counting stock must be carried out methodically and logically, and the vast majority of good stocktakers adopt similar routines. Switch off your mobile phone until you are finished.
Start with the top shelves and optics, and work down systematically until you have covered everything. Capturing all stock is crucial and common sense is necessary. Record stock counts to enable you to identify their location. Remember that stock may be stored in more than one bar, cellars, cupboard or garage.
Check gaps (inventory items that do not have a count recorded) to ensure you have not missed or recorded a product wrongly.
The cellar usually follows the bar. A professional stocktaker looks at dates on the stock and compares dates on stacked cases to ensure the longest dates are at the bottom and the shortest at the top. Make notes on your count sheet to remind you of issues that will form part of your final report to the
client.
Any trade professional should be able to count stock but not everyone can do these next steps. Produce an accurate result covering the period since the previous visit by:
l Extracting all delivery information from delivery notes by date
l Checking cost prices against invoices and update if necessary
l Extracting details of revenue from records kept and match it to the till records
l Calculating adjustments authorised by the client such as line-cleaning, cheap sales, complimentary drinks or quiz prizes
l Calculating the difference between products sold in multiple formats, such as table wines sold by the bottle or by 125ml, 175ml or 250ml glass. These probably won't equate to the same base selling price, so you will need to go through the PLU period sales report to check numbers sold in each format and make necessary adjustments
l Comparing what you have calculated as usage for each product with the number recorded through tills or EPoS system, and produce a variance report. Investigate serious differences before discussing results with your client
l Using your notes to compile a client report. Because the client may not be the person you deal with at the pub, make sure your report is easy to understand. Ensure the report is short, relevant and coherent.
l Discuss results and explain anything technical or difficult to understand. It is your job to make sense of the figures you produce and relay them to your client. It's essential that your client, and the person with overall responsibility for the result, feel confident that you have done the job properly and made an accurate assessment.
The best form of advertising for stocktaking services is word of mouth. If you do a good job, people will be happy to recommend you, but beware that if you do a poor job they will be even more likely to pass that on.
You can't buy experience, but rest assured that your perseverance and hard work will pay off.
false economy and out-of-date stock
QI run a small company of four pubs. Last week I had a presentation by a well-known EPoS provider who told me that one of the savings I could make, if I invested in his rather pricey product, was stocktaking fees. What is your view?
AWell, he would say that, wouldn't he? Don't get me wrong - EPoS has many wonderful features that assist the stocktaking process, but even the most sophisticated till cannot carry out a stocktake. It can tell you how much stock you should have left by analysing which figures have actually been entered as purchases and which sales have gone through the till. But it cannot physically tell you how much stock of a particular product you actually have. Dishonest bar staff or managers have been known to manipulate information without too much difficulty - but what are the chances of identifying dishonesty if no third party is checking? Even companies with full EPoS integration use independent stocktakers to carry out stocktaking. I suggest that you don't sacrifice stocktaking to pay for EPoS.
QI am new to the trade and have just moved into my first pub. I didn't employ a stocktaker when I took over as the vendor already had one lined up. The problem is that I have found a lot of stock that is out of date, as well as unsuitable glassware. What can I do?
AYou don't say whether or not the vendor's stocktaker was also acting for you. If so, you should be able to challenge why you paid for stock that was out of date. If he was not acting for you and you thought you could save money by taking advantage of that situation, you can't do much now. It's extremely important to have an independent person protecting your interests when you take over a pub and that normally means appointing your own stocktaker. There is nothing wrong with using one stocktaker to act between both parties at a business transfer but you must establish that he or she will look after your interests as well - this means looking at dates and condition of stock, suitability of glassware, testing spirit strengths, recording utility meters and so on. You'll be wiser next time.
