A stock report for head office in Turkey: what it should show

Head office usually sees the warehouse from a distance, through an Excel file. From it, management tries to work out how many items there are, whether the count agrees with the records and where a difference comes from. If the report is incomplete or muddled, management either says "everything is fine" or keeps asking questions without end. This article goes step by step through what a stock report sent from a warehouse in Uzbekistan to head office in Turkey should contain.

Which questions does head office ask?

The report has to answer five questions that are in the reader's mind:

1. How much stock is there, and what is it worth?
2. Does the physical count agree with the records?
3. If there is a difference, how big is it and where does it come from?
4. What is being done about it, and who is responsible?
5. Is there any slow-moving or risky stock?

Give the answer to each question as its own box or line, so the reader does not have to hunt through the report. If the answers do not fit on one page, the report is probably either too detailed or hiding the figure that matters.

The one-page summary and the detail table

The summary page has these parts:

• Scope and date: which warehouse, which zones, the count date and the cut-off time;
• Overall figures: number of items counted, share of items matching the records, number of items with a difference;
• Variance amount: total shortages and total surpluses shown separately, then the net amount;
• Ten largest variances: item, quantity, value and likely cause;
• Breakdown by cause: timing difference, wrong item, unit error, genuine shortage and so on;
• Actions: the task, the person responsible and the date.

Behind the summary page sits an item-level table. The columns should be fixed so that management can drill into any line it wants: item code, name, lot, unit, recorded quantity, counted quantity, difference, value, likely cause and status (open or closed). Sending the table as Excel allows filtering and sorting. Attaching the signed count certificate as a PDF shows who approved the figure.

Net variance can mislead

Shortages and surpluses cancel each other out. An illustrative case: item A shows +120 metres and item B shows −115 metres, so the net difference is only +5 metres. Yet there are two separate errors, one posted too high and one too low, perhaps the same goods confused between two items. That is why the report should give both the net and the gross (absolute) total: 120 + 115 = 235 metres. When the net difference is small but the gross one is large, two errors are offsetting each other, and both should be examined separately.

Currency and valuation

For head office the variance matters in value as much as in quantity. A few rules make this easier:

• value everything in one currency, and state in the report which one it is and at what rate, with the date, it was converted;
• calculate value at the cost held in the records, and show the selling price in a separate column;
• do not mix the local currency (som) and the head-office currency in the same table.

Suppose the total difference is 14,000 USD and most of it sits in three items. Those three items are the first place management will look; a list of hundreds of lines would bury that information.

Common mistakes

• Leaving out the report date or the cut-off time;
• taking the record balance not from the count day but from a 1C printout made a few days earlier;
• giving a variance without a cause (writing "−340 m" and leaving no explanation);
• mixing units, such as metres and kg in one table;
• mixing number formats: 1.250 is read as one thousand two hundred and fifty under one setting and as 1.25 under another where the dot is a decimal mark, so agree the thousands separator and decimal mark in advance;
• writing actions without an owner and a date;
• sending the report weeks after the count; once the difference has aged, the question "is it still valid?" calls for a new count.

In short

A good stock report is short, dated and explains its causes; every variance is tied to an owner and a date. In a StockSystem delivery the item-level variance table comes as Excel and the head-office summary as PDF, with the largest variances, their weight in value and the recommended actions on one page.