Why counts and records differ
Most differences are not theft. Before changing any figure, check the usual causes:
- Unrecorded documents: goods received or delivered without the receipt or delivery being entered, or entered against the wrong order.
- Timing: a delivery loaded but not yet recorded, or a transfer still on the road between godowns.
- Wrong product or unit: two similar products swapped, or cartons counted as pieces.
- Returns: customer returns put back on the shelf without a return being recorded, or the reverse.
- Damage, expiry and loss: goods written off physically but never in the records.
Full count or cycle count
| Full count | Cycle count | |
|---|---|---|
| What is counted | Every product in the godown at once | A small group of products each time, on a rotating schedule |
| How often | Usually once or twice a year, often at year end | Weekly or monthly |
| Disruption | Movements usually stop for the count | Little; the godown keeps working |
| Best for | A clean starting point, year-end figures | Catching problems early, keeping fast movers accurate |
A common way to plan cycle counts is to count your most valuable and fastest-moving products most often, for example monthly, and slow, low-value products once or twice a year.
The process, step by step
- Choose the scope and a cut-off time. Decide which godown and products you are counting. Record every receipt, delivery, transfer and return up to the cut-off before you start.
- Pause or separate movements. For a full count, stop receiving and dispatching. For a cycle count, keep goods that arrive or leave during the count apart until the count is done.
- Count without looking at the system figure. A “blind” count avoids people finding the number they expect. Count in the unit you stock in, and note loose pieces separately.
- Recount large differences. Agree a tolerance in advance, for example any difference above 2% or above a set rupee value, and have a second person recount those lines.
- Investigate before adjusting. Check the causes above: missing documents, transfers in transit, wrong product codes, unit mistakes, unrecorded returns. Fix the record at its source where you can.
- Adjust what remains, with a reason. Record each remaining difference as a stock adjustment with a clear reason such as damage, expiry or physical count.
- Have someone else approve. The person who approves adjustments should not be the person who counted, so mistakes and losses are visible to someone.
- Look for patterns. If the same products or the same godown keep showing differences, fix the process, not just the figures.
The difference as a percentage is (counted − system) ÷ system × 100. A shortage gives a negative figure.
Example count sheet
Illustrative example
Products and figures are invented.
| Product | System | Counted | Difference | Cause found | Action |
|---|---|---|---|---|---|
| Cooking oil 5 L carton | 48 | 40 | −8 | Delivery of 8 loaded yesterday, not recorded | Record the delivery; no adjustment |
| Black tea 950 g | 120 | 132 | +12 | Customer returned 12 packs; put back on the shelf but never recorded | Record the sales return |
| Detergent 1 kg | 60 | 57 | −3 | Torn packs found | Adjust −3, reason: damage |
Only one of the three differences needed a stock adjustment. The other two were record-keeping errors that would have come back if the stock figure had simply been overwritten.
Mistakes to avoid
- Overwriting stock figures without recording a reason.
- Counting while goods are still being received or dispatched.
- Letting the same person count, adjust and approve.
- Adjusting before checking for unrecorded deliveries, receipts and transfers.
- Counting only once a year, so problems are found months after they happened.
Doing it in Stockroot
- Record any missing receipts, deliveries, returns and transfers first. A transfer shows as In transit until the receiving godown confirms it.
- Create a stock adjustment for the warehouse, choose a reason (physical count, damage, theft or loss, expiry, correction or other) and enter the quantity you counted for each product. Stockroot shows the difference against the system figure.
- The adjustment stays Pending and does not move stock until it is approved. Approval is refused if it would take stock below zero or below what is reserved for customers.
- An approved adjustment cannot be edited. If it was wrong, reverse it; the reversal is recorded as a new adjustment, so the history stays complete.
About approval: in Stockroot, recording and approving an adjustment use the same permission, and a user can approve their own adjustment. To make step 7 a real control, give the adjustment permission only to the people who should approve, and have store keepers send their count sheets to them. See stock counts and adjustments in Stockroot.