Outline two different ways of managing stock with reference to records stocktaking
1. Periodic Stocktaking:
- In this method, stock is counted and recorded at regular intervals, such as monthly or quarterly.
- Physical counts are conducted to reconcile the actual stock on hand with the recorded quantities in the inventory system.
- Any discrepancies are investigated, and adjustments are made to the records to reflect the correct stock levels.
- This method requires dedicated time and resources to conduct stocktakes, but it provides an accurate snapshot of stock levels at specific points in time.
- By regularly tracking stock, it helps to identify inventory shrinkage, improve inventory control, and ensure accurate financial reporting.
2. Continuous Stocktaking:
- With continuous stocktaking, inventory levels are monitored and updated in real-time as goods are received and sold.
- Barcode scanning, RFID technology, and inventory management software are used to track stock movements and maintain accurate records.
- This method allows for better control and visibility of inventory levels without the need for physical stocktakes.
- It minimizes the risk of stockouts or overstocking, as inventory levels are constantly monitored and updated.
- Continuous stocktaking is more efficient and cost-effective compared to periodic stocktaking, as it eliminates the need for large-scale stock counts.