Inventory
How to run a stocktake
A stocktake is a physical count of all the inventory you hold, compared with what your inventory system says you should have. The differences, called variances, reveal lost, damaged, miscounted or misrecorded stock. Online stores usually do a full stocktake at least once a year and smaller cycle counts in between.
Step-by-step stocktake process
- Pick a date and freeze movement. Pause fulfillment and receiving during the count, or count outside working hours, so stock doesn't move mid-count.
- Process everything first. Ship any orders already picked, receive deliveries that have arrived, and log known damage.
- Print or export your count sheet with SKU, product and location, but hide expected quantities from counters so they count what's there, not what they expect.
- Organize the space. Make sure each SKU sits in one labeled place, and set aside returns and damaged items.
- Count in pairs or twice. One person counts, another records, or two people count the same area independently.
- Enter counted quantities and compare them with expected quantities.
- Recount large variances before accepting them.
- Investigate and correct. Find the cause where you can, then update stock levels in Shopify.
- Record the value of the variance for your accounts.
Download a free stocktake sheet
The sheet has columns for SKU, product, location, expected quantity, counted quantity, variance, unit cost and variance value. Variance and value calculate automatically.
Stocktake sheet
Free template with example numbers. Replace them with your own.
Full count vs cycle counting
| Full stocktake | Cycle counting | |
|---|---|---|
| What's counted | Everything, at once | A few SKUs at a time, on a rotating schedule |
| How often | Once or twice a year | Daily, weekly or monthly |
| Disruption | High: usually pauses fulfillment | Low: fits around normal work |
| Catches problems | Once a year | Within weeks |
| Best for | Year-end accounts, small catalogs | Ongoing accuracy, larger catalogs |
A common approach is to cycle count by value: count your highest-value and fastest-selling SKUs monthly, mid-range ones quarterly, and the long tail once or twice a year.
Handling variances
Variance = Counted quantity − Expected quantity Variance value = Variance × Unit cost
Worked example: five SKUsExample numbers
| SKU | Expected | Counted | Variance | Unit cost | Variance value |
|---|---|---|---|---|---|
| TEE-ORG-BLK-M | 120 | 118 | −2 | $12.00 | −$24.00 |
| TEE-ORG-BLK-L | 95 | 95 | 0 | $12.00 | $0.00 |
| HOOD-FLC-GRY-M | 60 | 57 | −3 | $27.00 | −$81.00 |
| MUG-CER-WHT | 200 | 204 | +4 | $7.20 | +$28.80 |
| CAP-CNV-NVY | 40 | 38 | −2 | $9.00 | −$18.00 |
| Total | −$94.20 |
Common causes of variances:
- Missing stock: shrinkage, damage not recorded, orders shipped but not deducted, wrong item picked.
- Extra stock: deliveries received but not recorded, returns restocked without updating inventory, a miscount at the last stocktake.
- Swapped variances: one variant up and a similar one down (for example, size M and size L) usually means a picking or receiving mix-up, not lost stock.
Fix the process behind recurring variances, not just the numbers. Shopify's Inventory adjustment changes report shows every adjustment made, which helps trace where stock went.
Dead Stock Carrying Cost CalculatorWhat stock unsold 90+ days is actually costing you every month.A stocktake is also the best time to spot dead stock: anything still sitting in the same spot as last time. The calculator above shows what it's costing you.
Want this handled automatically?Forecast demand and know exactly when to reorder, before you stock out or tie cash up in overstock.Try Verve AITips for a smoother stocktake
- Use SKUs everywhere, on shelves and on the count sheet. See the guide to SKUs.
- Count by location, so you know where differences come from.
- Use barcode scanners if you have barcodes on products; they cut counting errors.
- Track variance over time. A falling total variance shows your processes are improving.
Accurate counts also make your COGS and inventory turnover numbers reliable.
FAQ
What does stocktake mean?
A stocktake is a physical count of the inventory you hold, compared with what your system says you should have. It's also called a physical inventory count or stock check.
What's the difference between stock checking and stocktaking?
The terms overlap. A stocktake usually means a full count of everything, often once or twice a year. A stock check is often a smaller count of some products, closer to cycle counting.
How often should I do a stocktake?
At least once a year, usually at your financial year end. Many stores add cycle counts throughout the year: best-sellers and high-value items monthly, everything else quarterly.
What's an acceptable stock variance?
Set your own tolerance by value and by product. Investigate any variance on high-value items, and any pattern of missing stock on the same products, whatever the size.
Should I stop selling during a stocktake?
For a full count, many stores pause fulfillment or count outside working hours, so stock doesn't move mid-count. Cycle counts are small enough to do while trading.