Too little stock and you lose sales. Too much and cash sits on the shelf, or goods expire. Good stock control is about a few simple numbers and habits. Here they are.
Reorder point: when to order
The reorder point is the stock level at which you place a new order. Set it high enough to cover what you will sell while you wait for the delivery, plus a buffer for surprises.
Reorder point = average daily sales × days the supplier takes to deliver + safety stock.
Example: you sell 20 bags of sugar a day, the supplier takes 5 days to deliver, and you keep 40 bags as safety stock. The reorder point is 20 × 5 + 40 = 140 bags. When stock falls to 140, it is time to order.
Reorder quantity: how much to order
The reorder quantity is how much you buy each time. Balance the cost of ordering often against the cash and space tied up in large orders. Many businesses start with two to four weeks of sales and adjust from there.
Set levels per location
A busy branch and a quiet one should not share the same reorder point. Set levels per warehouse or branch so alerts reflect what each location actually sells.
Batches and expiry dates
For medicines, food and other perishables, record the batch (or lot) number and expiry date when goods arrive. This lets you find exactly where a batch went, and see what is about to expire before it does.
Sell the oldest expiry first
First Expired, First Out (FEFO) means issuing the stock that expires soonest, even if it arrived later. It is different from First In, First Out (FIFO), which goes by arrival date. For anything with a shelf life, FEFO is what prevents waste.
Count regularly, not just at year end
- Count fast moving and high value items more often, for example weekly.
- Count a few categories at a time instead of closing the whole store.
- Investigate differences while the period is fresh, then post the adjustment.
- Record write-offs with a reason, such as spoilage, damage or expiry, so losses are visible.
Value stock consistently
Pick one method of valuing stock and stick to it. A moving average cost recalculates the item's cost each time goods are received, which keeps your stock value and cost of sales realistic as prices change.
How Smart Suite helps
Smart Suite Inventory lets you set a reorder point and quantity per item or per warehouse, tracks batches and expiry dates, flags items inside an expiry window (30 days by default), issues stock oldest expiry first, blocks expired lots, records write-offs with reasons and values stock at moving average cost.