Year-end Stock Count

🧮 Overview

A stock count involves physically verifying the value of inventory your business holds - typically at cost price on a specific date, such as the year-end. This ensures your accounts reflect accurate inventory values, which affects year-end profits and ultimately your tax bill.

Recommended Steps

• Plan the Count 🗂

  Choose a low-activity time (e.g., after hours or during a quiet period). Although year-end is common, some businesses also opt for quarterly stock counts.

• Organise Tools & Space

  Gather essentials: stocksheets, clipboards, pens, scales, handheld scanners, etc.

  Make sure the stockroom is neat: label shelves, sort items clearly, and group large quantities for efficient counting.

• Assign Roles & Method

  Choose responsible and trained team members. Define counting methodology, for example, count in pairs, assign areas, and mark off completed sections with coloured pens to avoid double-counting.

• Categorise & Exclude

  Remove any customer-purchased items to avoid duplication. Flag damaged, obsolete, or slow-moving stock for special consideration or discount valuation.

• Compare & Investigate Variances 🔍

  Match physical counts with electronic records. Investigate discrepancies caused by labelling errors, misplaced stock, unprocessed transactions, or miscounts. Repeat counts if needed.

Why It Matters

• Accurate Financial Reporting

  Ensures inventory values on your balance sheet are reliable, supporting correct profit calculation and calculation of your corporation tax. Tight control over stock is important for investors, auditors and your management team.

• Control & Loss Prevention

  Detects shrinkage, damage, theft, or data errors - supporting better inventory management.