Counting Stock and Deciding What a Difference Means

This guide is for whoever answers for the stock in a branch or a warehouse: the stock controller, the branch storekeeper, and the supervisor who signs the count. By the end you will have a counting plan you can defend, a count that means something, and a rule for every difference it finds: timing, error or loss, and who signs for each one. Setting the plan up takes an afternoon. After that, a weekly cycle count of one category at one branch takes about an hour.

BigLedger keeps a stock ledger, and it is exact about everything a document told it. It cannot tell you whether the shelf agrees. The stock take in BigLedger measures the difference and changes nothing. Deciding what to count, controlling the count, explaining the difference and signing off the write-off is the stock controller’s job. It was the job before BigLedger, and this guide says where BigLedger helps and where a person has to do it.

Counting and variances, at a glance

Decide what to count, and how often, in a written plan: high-value small items every week, everything else in rotation (Step 1).
Set up the four controls before the count: movement accounted for, controlled count sheets, a blind count the supervisor runs, and a different person who accepts the variance (Step 2).
Count, one session per location, and close the session last (Step 3).
Read the band before you read the variance: a zero Variance means “within the band”, not “correct” (Step 4).
Investigate before you adjust: recount, then rule out the causes that are not losses (Step 5).
Correct the document that was wrong, rather than adjusting around it (Step 6).
Adjust for what is left, a loss or a surplus, one reason per document: an Adjust-Out at the current moving average and an Adjust-In at a real cost, finalised by someone who did not count, or reviewed weekly by finance where a branch is too small to separate duties (Step 7).

Steps 1 and 2 are on this page. Steps 3 and 4 are on Count and read the band, and Steps 5 to 7 on Investigate and write off.

Meet GadgetSphere

GadgetSphere Sdn Bhd (GS) sells smartphones, laptops, tablets, gaming and accessories through 22 branches. A flagship smartphone costs about RM 2,450 and fits in a jacket pocket. A phone case costs RM 12 and there are four hundred of them on a wall. Those two items need different counting plans, and most of this guide follows from that. The examples use branch GS-KV-01 in Klang Valley.

The standard every step serves

What BigLedger says is on the shelf must be on the shelf. Every receipt, sale, transfer and count either keeps that true or breaks it. Keep that in mind when a count shows 38 phones and the ledger says 40. The task is to find out why the two differ, not to make the report read zero.

Two rules follow from it, and neither is a software rule:

Record what is there, never what the paperwork says. A counter who writes down the ledger figure, or a receiver who signs for the delivery note’s quantity without counting, has hidden a difference.
Report a difference you caused, with the evidence. Do not quietly correct it. A storekeeper who scanned the wrong serial on Tuesday and fixes it with an adjustment on Friday has created two errors. BigLedger now shows a loss that never happened, and nobody can trace the first mistake. The fix for a wrong document is to void or reverse that document (Step 6). An adjustment is not the fix.

    flowchart LR
  ST["Stock Take session<br/>one per location<br/>measures, changes nothing"] -->|"GENERATE"| RP["Report<br/>expected quantity from the ledger<br/>Min · Max · Variance"]
  RP -->|"inside the band"| TM["Timing: nothing to do,<br/>if the count window was short"]
  RP -->|"outside the band"| RC["Recount by a second person<br/>finding in the Reason column"]
  RC -->|"a wrong or missing document"| VD["Correct that document,<br/>or key the missing receipt"]
  RC -->|"a transfer still in transit"| TT["Receive what arrived,<br/>chase the rest · no adjustment"]
  RC -->|"none of Step 5's causes,<br/>after two recounts"| SA["<b>Stock Adjustment</b><br/><b>FINAL posts stock and money</b><br/>adjustment account · stock account"]

Before you start

You can open Stock Take, Stock Adjustment, Stock Balance and the Stock Report applet for your branch.
The Stock Take applet’s Settings > Field Settings has been saved once. Until it is, closing a session shows Applet Settings Not Found!. The session is closed all the same, but it gets no Status Variance verdict.
Your company has a stock account and a stock adjustment account in its Default GL Codes, and an account for each reason you write stock off (Step 7). For GadgetSphere: EXPENSE-SHRINKAGE (unexplained loss), EXPENSE-STOCK-DAMAGE (damaged, unsaleable) and the default adjustment account for count corrections that are not a loss.

Step 1: Decide what to count, and how often

The outcome: a written plan that counts the stock most likely to go missing most often.

BigLedger has no count schedule, no count sheet and no ABC selection. Nothing reminds anybody that a count is due. So the plan is a document the stock controller owns, and the finance manager signs off each year.

Losses gather in a few places, so start with those:

Where losses gather	Why	GadgetSphere’s rule
High value, small and in demand	Easy to pocket, easy to resell	Flagship smartphones and wireless audio: every week, every branch
Four moments: receipt, transfer, return and the count itself	Stock changes hands, and a miscount at any of them looks like theft later	Count the receipt at the door (Step 3 of Cut off, close and lock the month on stock); receive transfers line by line; count returns before they go back on the shelf
Items with a history	A variance last month is the best predictor of one this month	Anything written off last month goes on next week’s list
Everything else	Low value per unit, high volume	Accessories by category, once a month in rotation; a full count of everything at the year end

When a branch reports a loss, do not start with a full count. Count the high-value, small items first, then look at the four moments for the weeks since the last clean count. A full count of 5,200 items finds the problem slowly and then cannot say which week it happened in.

How you know the plan is right: every item group has a named counting frequency, and in any quarter every high-value item at every branch has been counted at least ten times.

Step 2: Set up the four controls before the count

The outcome: a count whose result you would sign.

A count means something only when four things are true. BigLedger supplies part of one of them. The rest is how the count is run.

Movement is stopped, or accounted for. BigLedger does not freeze anything during a count. It does something more useful for a shop that stays open: it works out a tolerance band for the movements during the count (Step 4). If you can stop trading, for example before opening, the band collapses to a single figure and the count is simpler to read.
The count sheets are controlled. BigLedger has no count sheet. For a paper count, print the Stock Balance With Serial report from the Stock Report applet. It has Add, Subtract and Stock Count columns. The branch supervisor numbers the sheets, issues them, and collects every one, including the spoiled ones. The supervisor knows the sheets are controlled when the numbers run unbroken: every sheet issued is back, used or spoiled. For a handheld count, give each counter their own device in the session so each record shows who counted it.
Counters do not see the expected figure (a “blind” count). BigLedger has no blind-count mode. The Report tab shows the system quantity next to the counted one as soon as a report is generated. The only lever is permission: a counter who does not hold read permission on the session’s report lines cannot see them on the Report tab. So the supervisor, not a counter, presses GENERATE, and a blind count is a rule the supervisor runs, not one BigLedger enforces. Test it before count night: sign in as one counter and confirm the Report tab shows them nothing. Then rely on the recount in Step 5, by a second person, to catch a count that copied the expected figure.
A different person accepts the variance. The person who counted, or who holds the keys to the stockroom, must not also accept the variance and finalise the write-off. BigLedger has no approval on an adjustment (Step 7). That separation has to be set up by who is given the adjustment applet, and a named person.

For GadgetSphere’s weekly phone count at GS-KV-01: two staff count, each on their own device; the branch supervisor generates the report; the area stock controller reviews and accepts the result, and does not count at that branch.

Next: Step 3, count.

What success looks like

Pick last month’s adjustments for one branch and spend five minutes on them. You pass if:

Every Adjust-Out traces to a stock take session, or to a damage report, by its reference.
None of them is an Adjust-In at zero cost.
The shrinkage account shows the month’s losses, with no count corrections mixed in.
The person who finalised each one did not count that session.
No adjustment covers a transfer still in the queue, or a receipt keyed later.

Common mistakes

Mistake	What you see	Fix
Expecting the stock take to post the variance	The count is done and the balance has not moved	Raise the adjustment (Step 7). The count only measures
Adjusting a branch for a transfer still in transit	A loss at the receiving branch, then a surplus when the transfer is received	Void the adjustment; receive the transfer
Adjust-In with no price	The average cost drops; margins look too high	Void and re-key at the current average, or reset the average (Costing Internals)
Letting a session run overnight	Nearly every item inside the band	Keep the window short: collect the devices at the planned end, and close once the reasons are saved
The same person counts and finalises	Nothing, until an auditor asks	Give the Stock Adjustment applet only to people who do not count, name the finaliser, review weekly — hiding FINAL removes it for everyone
Correcting your own mistake with an adjustment	Two wrong documents instead of one	Void the wrong document and say so