Stock control when you cannot yet afford a system

Buying a stock system before you can afford it is a bad idea, and so is waiting until the business is large enough to be in real trouble without one. Here is what to do in between.

The goal is not perfect records. It is knowing two things: what is about to run out, and whether what left the shelf matches what came into the drawer.

## Count the twenty lines that matter, weekly

Not everything. In most shops a small number of lines are most of the turnover, and those are the ones where running out actually costs you. Count those every week, on the same day, and write the number down where last week's number is visible next to it.

Everything else can be counted monthly or when somebody notices a gap.

## Write down what you paid, next to what you charge

Most small businesses know their turnover and not their margin, and the two lead to opposite decisions. The busiest shelf in the shop can be the least profitable one, and nothing tells you unless the cost price is written down somewhere you look.

One column in the same notebook is enough to start.

## Set a reorder level and write it on the shelf

For each of those twenty lines, decide the number at which you reorder, and put it where the stock is. Then anybody can see that it is time, not just you.

The number is roughly: how many you sell in a week, times how many weeks the supplier takes, plus a little. It does not need to be precise to be useful.

## Reconcile the drawer against something, daily

If you are not yet recording sales properly, at minimum record the takings and the count of the top few lines at open and close. A shortfall you find the same day is a conversation; a shortfall you find in six weeks is a mystery and possibly an accusation.

## Keep supplier invoices in one place

Stock control starts before anything reaches the shelf. Keep every supplier invoice in one file, in date order, whether that is a box file or a folder on a phone. When a count comes up short, the first question is whether the goods ever arrived in full, and the invoice is where the answer lives.

Check deliveries against the invoice while the driver is still there. A carton short, caught at the door, is a phone call. Caught a week later, it is an argument.

## Separate the till from your pocket

If the owner takes cash from the drawer for lunch, fuel or a quick purchase, write it down on a slip and put the slip in the drawer. It feels unnecessary when it is your own money. It stops being unnecessary the first time the drawer is short and nobody can say whether that is theft, a mistake or the owner's lunch.

The same goes for stock taken for the house or given away as a favour. Write it down. A notebook only works when everything that leaves the shelf leaves a line in it.

## When it is time to buy a system

Three signals, any of which is enough.

You are losing sales because things were out of stock and you did not know. That is revenue walking out, and it is usually larger than the cost of the system.

Stock takes longer to count than you can spare, or is no longer done honestly because of it.

You cannot answer what sold last month without a day's work.

At that point the arithmetic has changed and the software pays for itself. Before it, the notebook is the right tool, and there is no shame in it.