Stock control: the basics
Stock control includes tracking and accounting for the items you sell, use or manufacture. The stock control system you use will depend on the size of your business and the type of stock you have. In some cases stock is also referred to as inventory.
There are four main types of stock:
- raw materials
- work in progress
- finished goods
Knowing what stock to buy, when to buy it and how much to buy is essential for good stock control.
Stock items may vary in value, and certain stocks may be perishable or seasonal, which can influence how you manage it.
When you are developing a stock control system for your business, you need to take into account the associated costs of holding stock, such as:
- financing (interest costs).
It's also important to work out how much stock you need to hold in order to run your business successfully. You can do this by calculating your stock turnover rate and performing an annual stocktake, which may be legally required for some business.
This guide outlines the basic elements and methods of stock control.