What is stock control? Stock control is keeping a record of all the stock a business has available at any one time.
There are several different items classed as stock:
- Raw materials and components to make a new product
- Work in progress – stock of unfinished products
- Goods ready for resale
- Consumables – including stationery and printer supplies
Stock control can play an essential part of any business. A sound control system will allow you to know the quantity of each product available and if you have enough products to meet the needs of both the business and your customer. A company may have a lot of capital tied up in stock, and a sound stock system can help to keep this to a minimum.
Even if you are just running a small business reselling products from home, it may be worth keeping a system, so that when the company grows, you already have a stock procedure in place. For a small business, a manual stock control system on cards or using a book may suffice.
Stock Control Software
Using software will enable the business to value stock quickly, record stock movements and find out how well an item of stock is selling. More advanced packages will also automatically reorder stock when it hits a low level. As with all software, the end results are only as good as the data entered.
Most good accounts packages include stock as part of their software; this may be one of the easiest ways to keep track of stock. Xero Accounting is one of the top accounting packages and includes inventory control.
For a large business holding a vast amount of stock, a specialised software package may be more suitable.
A small business may just need a manual stock control system, using stock cards or a book.
What is Stock Control? – How much Stock should I keep?
How much stock you store will depend on business to business and the type of stock item. If you are a large business with a high turnover of stock, you do not want to run out and can’t fulfil your orders.
The amount of stock may also depend on the storage space you have available. If you run out of space, it is possible to rent further storage.
There are also other things worth considering:
- Is stock radially available or will it be in short supply?
- Is there a minimum order quantity?
- Can you predict demand, it may vary from season to season?
- Is the price steady, or can you purchase it at a reduced price?
- Are there any discounts for bulk purchasing?
What is Stock Control? – Security
If you are holding stock, security is an important part of the procedures. You will need to ensure that the stock is in a secure place and that only certain staff members have access to it.
Write up a complete procedures policy and train staff on how to implement it.
One option is that rather than holding stock is to sell from an affiliate site. The items will drop-ship directly from the supplier. An example of affiliate sales is Amazon.
What is stock control? – Manual Stock control
For a business not holding much stock, a simple manual stock control system may suit your needs, this page includes a free stock control card. A stock control card will include details like description, value, location in the warehouse, where to order it from, quantities and reorder level.
A small bathroom installation business will have an order book. Rather than getting to the job and the items required are out of stock, it is better to hold stock for a few weeks of jobs.
Return from what is stock control? to bookkeeping basics page.