Stocktake report: what it must contain – sample and template

The count is over. The count sheets are on your desk, the book balance is in a file on your computer, and the stocktake report you have to sign must be ready by tomorrow morning. If your signature is on the report, it must also be clear later on what the count found and why certain figures don’t match. Otherwise all that sits next to the shortage is your signature, with no explanation. Let’s go through what the report must contain and how to get it right first time. You can also download a fillable stocktake report template here. The whole stocktake process is described in the stocktaking guide and the preparation in the year-end stocktake article; here we focus only on the last step.

The count is an activity; the report is the written record of its result. The report can be signed and compared with the book balance, and accounting can use it to correct the stock records or the fixed asset register. To do that, the report has to answer three questions:

• Did the count take place? Date, place, counters and signatures.
• What was found? The actual quantity and condition on each line.
• What differed from the book balance, and why? The difference together with an explanation.

If the report has only signatures and the sentence “no differences found”, nothing can be checked against it later. If it has only a count table that has not been compared with the book balance, it is a count sheet, not a report. The template has room for the answers to all three questions.

The fields are given in the same order as in the template, so you can fill it in and read the explanations alongside.

Report number. Give the report a number; there is a dedicated field for it in the template header. The accountant can refer to the number in the entry, and years later the report is easy to find by its number.

Company and registry code. The report must show which company’s books it belongs to. If several companies share the same warehouse, this is the first thing you will be asked to clarify.

Stocktake type and basis. State whether it is a year-end stocktake, an interim stocktake, a change of responsible person, or something else. As the basis, give the number of the management directive or the clause of the accounting policies and procedures under which the count was carried out. Without a basis it is hard to show later that this was a proper stocktake and not just an informal look round.

Assets counted. Fixed assets, stock, low-value assets or other assets. One report per asset type makes the table easier to read and helps you use consistent explanations.

Balance date and the count’s start and finish times. These are different pieces of information. The book balance is fixed as at one moment, but the count may take several days. If the report has only one date, nobody knows which moment’s balance the actual quantity was compared with, and any delivery that arrived in between can become an apparent difference.

Location and person responsible for the assets. State the warehouse, building or department, and the name of the person responsible for the assets. Draw up a separate report for each location; otherwise it is hard later to tie the differences found to a specific location and area of responsibility.

The template has the roles on separate lines: the person in charge of the stocktake, the counters, the independent checker and the accounting representative. Write out the names and add job titles. Follow one important principle: if you are responsible for the assets yourself, don’t be the only person counting them. The reason is not distrust but the reliability of the audit trail. A report in which one person alone confirms the existence of assets in their own care is weaker evidence later, because nobody else has checked the result.

The table is the core of the report. Each line represents one asset or stock item.

Condition and location are easily left blank, because they are not strictly needed to count the quantity. Without them the report answers “how many” but not “in what condition” and “where”. For fixed assets, condition and location are often more important than quantity.

A counter may find a device on a shelf that has no line in the list from the books. If the template has no place for it, the find may go unrecorded and the same asset will turn up as a surprise again next year. The template has a separate table for assets not on the list: identification (number, serial number or description), item name, unit, quantity, condition, location and notes.

After the table comes a numerical summary: number of lines counted, number of lines with a difference, shortage and surplus by number of lines, quantity and value, assets not on the list, and faulty or unused assets. The accountant calculates the financial impact according to the accounting principles the company applies. The summary lets the management board understand the result without reading through the whole table.

Next come the explanations. For each line with a difference or a change in condition there is one entry, containing the reason (counting error, recording error, actual shortage, actual surplus or change in condition), a short explanation, a proposal (write-off, recognition in the books or further investigation) and the name of the person who identified it. If a difference has been found but there is no explanation, no well-founded decision can be made on the basis of the report, and the document is sent back for completion.

Where there are differences, the person responsible for the assets adds their statement. If that is you, write your statement before the approver approves the report. It is not an accusation but a chance to put your explanation on record.

In the template, the signatures are split into three blocks, for a reason. The counters confirm that the table reflects what they found in the count. The responsible person confirms that they have reviewed the result. The approver – a management board member or the person designated in the accounting policies and procedures – approves the report and the changes to be made on its basis. The three blocks represent three different responsibilities.

At the end of the template is a section for accounting use, recording when and with what reference the report was entered in the books. The accountant fills in this part; whoever draws up the report leaves it blank.

Below is an example of a completed results table from a stocktake of low-value assets. The lines are invented and contain no real company’s data. To keep it readable on a phone, the table has been shortened: in the template, unit, location and notes are separate columns, while here all quantities are in pieces.

The first line goes into the explanations table with the reason SH (actual shortage) or CE (counting error), depending on what the check count shows. The third line goes there with the reason CC (change in condition) and shows why the condition column is needed: the quantity matches, and without that information everything in the report would look fine, even though two chairs are broken.

The report is drawn up after the changes have been made. The stock records are corrected from the count sheets and the report is produced later as a formality. So the change was made on the basis of a document that did not yet exist, and the signature confirms after the fact a change that has already been made.

The report consists only of a table. The header, the basis for the stocktake, the balance date and the signatures are missing. Such a document is a count sheet, not a complete report, and the missing information has to be requested later piece by piece.

Other common mistakes:

• The balance was taken at the wrong moment: the count was on Friday, the balance was taken as at the following Monday, and a delivery arrived in between.
• A difference has been found but not explained: next year the same shortage appears again and nobody knows whether the cause is the same or new.
• Condition is not recorded: a device has not worked for years but is still in the register as an asset in working order.
• Assets not on the list are not recorded: the list has no line for them, the template has no place for them, and the counter moves on.

The report itself changes nothing in the books. On its basis, the approver decides whether a shortage is written off, a surplus recognised, and faulty assets written off or written down. The accountant makes the necessary entries. That is why the report must contain all the information needed for the decision; otherwise the count sheets and explanations have to be requested again later.

The Estonian Accounting Act does not prescribe a specific format for a stocktake report. The company has to set out its stocktaking procedure in its accounting policies and procedures (§ 11(1)); a micro undertaking is not required to establish accounting policies and procedures.

If an accounting entry is made on the basis of the report, the source document for the entry must contain enough information for its content and justification to be verified. As the minimum information in a source document, the Act (§ 7(2)) lists the time of occurrence, a description of the economic content, and figures such as quantity, price and amount. The Act does not list a signature among the mandatory details of a source document. Signatures may still follow from the company’s accounting policies and procedures, and they help show who recorded the result, who reviewed it and who approved it.

Accounting source documents must be kept for seven years from the end of the financial year in which the business transaction was recorded in the accounting journals and ledgers on the basis of the document (§ 12(1)). Even a report that did not lead to an entry may still count as one of the other business documents needed for the audit trail of the annual accounts and the stocktake (§ 12(2)). It is therefore practical to keep all stocktake reports for at least as long.

The report is the last step of the stocktake, which is why all the manual work that came before piles up there: count sheet data is keyed in, balances are looked up, differences are calculated and explanations are chased after the fact. If drawing up the report is the longest stage of the stocktake, the problem is probably not the template but the fact that the book balance, the count results and the explanations live in three different places. This is part of the true cost of a manual stocktake that you don’t see from count-day working hours alone.

If the book balance and the count result are in the same system, there is no need to calculate differences by hand or look up balances separately. The content requirements for the report stay the same, but there is less manual work.

See how a stocktake works with an inventory management system →