Recount rules: when to count again and when to stop

In a count, 42 lines did not agree with the records. One person wants to recount all of them, another says "the difference is small anyway, let's move on". Both are wrong: recounting every line stretches the day, while recounting none carries a counting error into the report as if it were a real variance. The answer is a recount rule written before the count: a threshold, a second team and a final decision. This article explains how to set one up.

Why a written threshold

Without a threshold the decision changes with fatigue and with who is present; a difference of the same size is recounted in one zone and waved through in another. A threshold combines three criteria, and a line is recounted when any one is exceeded:

• value: for example, a difference above 100 USD;
• rate: a difference exceeding, say, 5 per cent of the recorded quantity;
• special cases: stock where there should be none, a negative balance, or an item in the records that cannot be found at all.

The figures differ from business to business; what matters is that they are written before the count, together with the warehouse manager and accounting. For products with a measuring tolerance (such as metres of fabric), differences within the tolerance do not enter a recount.

Example: from 42 lines to 18

In an illustrative count there are 300 lines and 42 show a difference. Of these, 18 exceed the threshold. Assume that recounting one line takes 6 minutes on average:

• recounting all 42 lines: 42 × 6 = 252 minutes, or 4.2 hours;
• recounting only the 18 lines: 18 × 6 = 108 minutes, or 1.8 hours.

The difference is 144 minutes, or 2.4 hours. For the 24 lines (42 − 18) below the threshold, the cause is written down and they are left; they enter the report as "below threshold" and are not hidden. Suppose that in 11 of the 18 lines the second count differed from the first and agreed with the records: those were counting errors. In the remaining 7 lines the second count confirmed the first; the difference stands and its cause will be investigated. 11 + 7 = 18.

The second team and the blind count

The team that did the first count does not do the recount; a second team does. The second team sees neither the first count nor the quantity in the records. A team that knows the figure counts "until it fits", and that is not an independent count. Do not write the recount result over the old one; keep it in a separate column, with the time and a signature.

The decision flow: when to stop

1. If the second count equals the first, the difference is confirmed; the count ends and the investigation of the cause begins.
2. If the second count equals the records, the first count was wrong and the line is closed.
3. If the second count equals neither the first nor the records, a third count is made, carried out jointly by the team lead and the warehouse manager.

After the third count there is no more recounting. If two counts agree, they are accepted; if they still do not agree, the item is measured separately with an instrument (scale, tape) and the result is written into a report. The count supervisor has the last word and the decision is signed.

What to watch in a recount

A recount is worth as much as it is independent of the first count:

• do it on the same day; if it slips to the next day, movement starts again and no one can tell whether the difference came from a counting error or from movement;
• the zone must be locked meanwhile, with no goods entering or leaving;
• count in the same unit as the first count; if cartons become pieces, the two figures cannot be compared;
• read the labels, but do not skip measuring because "the label says so";
• write opened cartons, damaged goods and unlabelled items on separate lines.

In short

A written rule works the same way at every count and settles the argument before the count ends. In StockSystem counts, when one team finishes a zone another team does a check count, and lines that do not agree are counted again the same day.