Stock take

Counting what is physically on your shelves and checking it against what your records say you have shows you where the two disagree. You find out why, and correct the records. That exercise is called a stock take, or an inventory count in the US.

There are two ways to do it. A full stock take counts everything at once, usually at year end, and often means closing for a day or two. Cycle counting counts a few locations or products each day or week, so every item is counted several times a year and the business never stops.

Most differences have dull causes: an item put away in the wrong place, a return nobody booked, a pick scanned twice. Finding the cause matters more than fixing the number, otherwise the same gap reappears next month.

Which method your tax authority accepts depends on your country; ask your accountant.