12 Reasons Why You Have Stocktake Discrepancies

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Stocktake discrepancies happen when the actual quantity of inventory stock on hand is different from the quantity recorded in an inventory system for any particular item. Unfortunately, this is a real issue every business tasked with maintaining and controlling inventory is faced with. If not avoided or detected, discrepancies will bring about various damaging results such as loss of sales, build-up of stocks and customer dissatisfaction.

Most causes of stocktake discrepancies can either be due to human or procedural errors or faults, here we identify 12 common causes for discrepancies and what you can do to resolve them. Although the list below tackle possible root-causes, keep in mind that there are other causes of stocktake discrepancies unlisted, which may depend on the industry and method used in keeping inventory records.

Common causes of stocktake discrepancies

  • Incorrect data recorded during receiving/inbound stock
  • Misplaced stock/incorrect location
  • Inadequate handling of damaged and returned stocks
  • Stock loss due to theft
  • Human error during stocktake process
  • Incorrect unit of measurement in counting used
  • Not updating the inventory system
  • Stocks incorrectly labelled
  • Stocks mistaken for similar product and mixing
  • Human error during order processing (e.g. picking)
  • Supplier fraud
  • Faulty inventory management software or stocktake equipment

Resolving inventory discrepancies

The best way to battle discrepancies is to establish steps to help avoid it from happening in the first place. Common best practices to avoid stocktake discrepancies include the following:

Check for computation errors

The first thing you should check is calculation errors as it is something simple and provides a good starting point!

Re-count stock

If numbers are still not matching up, it could simply be a mistake during the original counting process. The best way to remedy this is to do another count of your stock. Here are some tips on how to conduct a successful stocktake.


Check for mixed products

Maybe one product has been mixed in with others. This can occur, especially if products or packaging are similar to each other. In the same way, ensure that the correct product is counted correctly, as it may have been mistaken for a similar product.

Check for similar stock on other locations

Though similar stock should be together, there is still the possibility that warehouse staff have mistakenly placed the stock somewhere else.

Ensure ideal units of measurements

Ideally, staff should be trained on the procedure. However, there is still a chance that someone may have counted in different units of measurement, for example, litres or pounds, instead of boxes or individual units.

Verify outstanding orders

There may have been outstanding orders that were invoiced but not picked yet so use your inventory management software to identify any outstanding orders.

Verify that the SKU or product identification numbers are correct

It’s not unheard of for products to be labelled with the incorrect SKU, thus upsetting your inventory records. Check that the description in your inventory management system actually matches the product you’re counting.

To help avoid stocktake discrepancies in the future, understanding their typical causes is the first step. Otherwise, you risk not addressing core reasons for discrepancies in the first place and the problems will continue, creating a myriad of further complications when coming to reconciling of accounts at the end of the year.

In order to stay on top of accurate inventory stock levels and avoid stockouts, overstocks, and discrepancies, you need to be using an inventory management system that allows for enhanced inventory visibility and control of each and every product. Though errors related to shrinkage, location errors, human errors, and inadequate return policies are all major factors, not having the right inventory management solution in place could be the biggest cause of all.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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