Who should count a factory's stock at year end
Who should count a manufacturer's stock at year end, why not the storekeeper, and how to run tagged two-person counts and record the result.
By Achekam · · 4 min read · For Manufacturing businesses in South Africa, Nigeria, Kenya
In many small factories the year-end count is done by the people who know the stores best: the storekeeper and the stores assistant. They know where everything is, they finish quickly, and the numbers they hand in match the records almost perfectly. That last point should worry the owner more than it reassures them.
A stock count is not just a measurement. It is a check on the people who look after the stock, and nobody can check their own work. This article explains who should count, how to organise them, and how the result reaches your books in Achekam.
A count is a check on the storekeeper
AccountingTools notes that inventory counts are typically done by trained staff who are familiar with the inventory system but not directly responsible for keeping the inventory records. Both halves of that sentence matter.
Familiar with the system means counters know the units of measure, can tell a finished item from work in progress, and understand how the location codes work. Sending people who have never been in the stores produces a slow count full of errors.
Not responsible for the records means the people who receive goods, issue materials and keep the stock records should not be the ones who confirm the total. If the storekeeper has been making errors, or covering losses, a count by the storekeeper will reproduce the records rather than test them.
The same principle runs through the rest of the stock cycle. AccountingTools advises that the person who places inventory purchase orders should not be the one who receives or counts the goods on delivery. A buyer who orders, receives and counts can order goods that never arrive and nobody would know. Separating those roles day to day makes the year-end count easier to trust.
Who that leaves in a small factory
In a business with a dozen staff, "independent" has to be practical. Good candidates include:
- staff from the office or sales who know the products;
- production supervisors counting stores they do not run;
- the owner or a director on the high-value items; and
- your external accountant or auditor observing, if they attend.
The storekeeper still has a role: on hand to answer questions and to find items, but not holding the pen.
Two-person teams: one counts, one records
AccountingTools recommends two-person count teams, one person counting and the other recording the count on a tag. One copy of the tag is fixed to the stock and the other is kept by the team.
The split slows nobody down and catches a lot. The counter calls out what they see; the recorder writes it and can query anything that sounds wrong. The tag left on the stock shows at a glance which items have been counted, so nothing is counted twice or missed.
Pair people so that each team includes someone who knows the products and someone who is independent of the stores.
Numbered tags and checking for gaps
AccountingTools recommends sequentially numbered two-part count tags so that every tag can be tracked through the count. After the tags are entered, it advises checking a report sorted by tag number for gaps in the numbering and investigating any gaps.
A gap means a tag went missing: an item counted but not entered, or a tag spoiled and not returned. Either way, it must be resolved before the count is closed. A simple tag control routine:
- Issue each team a range of tag numbers and record which range went to whom.
- Collect every tag at the end, including spoiled and unused ones.
- Enter each used tag and sort the entries by tag number.
- Check the sorted list for gaps and duplicates.
- Follow up every gap with the team that held that range.
Entering the counts by location in Achekam
With the Warehousing add-on, a business keeps stock locations such as warehouses, stores, bins and vans on the server, with the quantity on hand at each. When a count is entered for a location, Achekam sets that location's quantity to what was counted and records the difference as an adjustment.
Organise your tag ranges by location so that entry is straightforward: all the tags for the raw materials store, then all the tags for the finished goods warehouse, and so on. Have someone who did not count enter the results, and have a second person check the entries against the tags before they are saved. For businesses that hold the same item in several bins, cycle counts across multiple bins shows how to handle it.
Posting the value difference yourself
There is a limit to be clear about. Stock counts, wastage, transfers and opening quantities do not post to the general ledger in Achekam; only till sales and till returns move the inventory account. Entering the count corrects the quantities by location, but the inventory value in your books does not change with it.
So once the count is final, work out the value of the differences: each item's counted quantity against the recorded quantity, valued at its cost. Agree the total with your accountant, then post it as a manual journal to inventory and to a stock adjustment account. Keep the tag listing, the gap check and the valuation together as the support for the journal.
While the counters are in the stores, ask them to flag damaged and slow-moving items as they go; finding slow-moving stock before the count explains what to do with that list. A retail version of the same exercise is described in running a stock take.
Plan the count now
AccountingTools' inventory count procedure sets out the full sequence, from preparing the stores to reconciling the tags. Choose your count teams this week, order numbered two-part tags, and tell the storekeeper well in advance that their job on the day is to help, not to count.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
