Stock is money sitting on shelves. If the quantities in your books do not match the quantities in your store, you cannot trust your profit, your balance sheet or your reorder decisions. This guide explains the three tools that keep books and shelves in agreement: the stock register, the product ledger and stock adjustments.
The stock equation
For any product over any period:
Opening stock + purchases − sales ± returns ± adjustments = closing stock
If you can see each of those lines for a product, you can explain its closing figure. If you cannot, you are guessing.
Example for one product in October:
| Line | Quantity |
|---|---|
| Opening stock, 1 October | 120 |
| Purchases | 200 |
| Sales | (230) |
| Sales returns | 5 |
| Purchase returns | (10) |
| Adjustment, damaged | (3) |
| Closing stock, 31 October | 82 |
Check: 120 + 200 − 230 + 5 − 10 − 3 = 82.
1. The stock register
A stock register is a list of every product with its opening quantity, what came in, what went out and what remains, usually with its value.
Use it to answer:
- How many units of each product do I have?
- What is the total value of my stock?
- Which products are not moving?
Review it at month end, and compare the total value with the inventory balance in your accounts. They must agree.
2. The product ledger
When one product's quantity looks wrong, you need its history. The product ledger lists every movement of that product in date order: each purchase, sale, return and adjustment, with a running balance.
Use it when:
- a salesperson says "we had stock yesterday",
- a count differs from the system,
- a margin looks wrong, or
- a customer disputes a quantity.
It is the stock equivalent of a customer ledger. Most stock questions are answered in a few minutes with it.
3. Stock adjustments
Physical stock and book stock differ from time to time: breakage, theft, expiry, miscounts, unrecorded samples. The right response is not to overwrite the quantity. It is to record an adjustment:
- the product,
- the quantity, positive or negative,
- the date,
- and the reason.
The adjustment moves stock and posts an entry at the current average cost, so your inventory value and your profit reflect the loss or gain. Overwriting a number hides it.
When to adjust
| Situation | Adjustment |
|---|---|
| Counted 98, books say 100 | −2, reason: count difference |
| Damaged in the store | negative, reason: damaged |
| Free samples given | negative, reason: samples |
| Found units not recorded | positive, with a note and an approver |
Require an approval above a limit, and review adjustments monthly. A pattern of negative adjustments on one product is a warning.
A physical count routine
- Freeze movements for the area being counted, or note the time.
- Count with two people, one counting and one recording.
- Compare with the system quantity at the same moment.
- Recount any difference above a set level.
- Investigate before adjusting: late purchase entry? an unrecorded return?
- Adjust with a reason, and keep the count sheet.
Count fast-moving products often, and the whole store at least quarterly.
Common mistakes
- Overwriting quantities. No history, no cost effect.
- Adjusting without investigating. The real cause remains.
- Counting during sales. The numbers are out of date as you write them.
- No reason on adjustments.
- Ignoring the stock value total. It should match the accounts.
How OneAccounts does it
The Products page shows each product's opening quantity, inflow, outflow and closing quantity, with the closing stock value and the total stock value. The product ledger lists every movement of a product and can be printed as a PDF. Stock adjustments take a signed quantity, a date and a reason, write a stock movement and post an entry at the current average cost; they cannot take a product below zero.
OneAccounts has no physical-count screen, so count on paper or a sheet and enter the differences as adjustments. See Trading ERP software and average cost explained.
Frequently asked questions
What is the difference between a stock register and a product ledger?
The register summarises every product. The ledger lists every movement of one product.
Why record an adjustment instead of changing the quantity?
An adjustment keeps the history and posts its cost effect to your accounts.
How often should I count stock?
Fast-moving items weekly or monthly; everything at least quarterly.
Who should approve adjustments?
A manager or the owner, above a limit you set.
Should the stock register agree with the balance sheet?
Yes. The total stock value should equal the inventory balance in the accounts.