Every trader has met the problem: a customer orders ten units, the salesman agrees, and the store has six. The invoice has already gone. Now you must apologise, substitute or buy in a hurry. Selling what you do not have damages trust, and it also corrupts your books, because stock goes negative and the cost of goods sold becomes meaningless. This guide explains how to prevent it.
Why overselling happens
- The stock figure is out of date. Purchases have not been recorded yet.
- Several salespeople sell the same item. Nobody sees the live quantity.
- Stock is kept in a spreadsheet that is updated at the end of the day.
- The system allows anything. It accepts a sale of 10 when 6 are on hand.
The cure is a stock check at the moment of sale, using stock that is current.
Rule 1: Record purchases when goods arrive
Stock can only be checked against what you have recorded. If a supplier's goods have arrived but the bill is not entered, the system believes the shelf is empty. Make "enter the bill when the goods are received" part of your routine, and give the store a way to tell accounts when a delivery arrives.
Rule 2: Start with correct opening stock
The first stock figure must be a real count, with a real cost. A wrong opening quantity makes every later check wrong. Count before you go live.
Rule 3: Check at the point of sale
When a salesperson enters an invoice, the quantity available should be visible next to the product, and a sale of more than the available quantity should be stopped.
Example:
| Product | On hand | Order | Result |
|---|---|---|---|
| Cooking oil 5 L | 6 | 4 | Allowed, 2 left |
| Cooking oil 5 L | 2 | 3 | Stopped: only 2 available |
A stop is better than a warning. A warning is clicked through when the customer is waiting.
Rule 4: Stop negative stock everywhere
Overselling can also come through the back door:
- Cash sales at the counter.
- Adjustments that take stock below zero.
- Purchase returns that send back more than is left.
- Editing an old invoice to a larger quantity.
A good system applies the same rule in all of these places.
Rule 5: Reconcile regularly
Even with a check, stock in the system and stock on the shelf drift apart through breakage, theft and errors. Count a few products every week and the whole store every quarter. Record the difference as an adjustment with a reason. See stock register, product ledger and adjustments.
What to do when the shelf has stock but the system says no
This usually means a purchase has not been entered.
- Check the supplier's delivery note.
- Enter the purchase bill.
- Complete the sale.
Do not override the check by entering the sale as a line without a product, because a manual line has no stock to check and no cost to post.
Common mistakes
- Allowing negative stock "just this once". It is never once.
- Selling free-text items. They bypass the stock check.
- Late purchase entry. The check is blocking sales that are possible.
- No periodic count. Errors accumulate.
- Different rules for cash and credit sales.
How OneAccounts does it
On a sales invoice, each product shows the quantity on hand. If the quantity entered is more than the stock available, the screen shows "Insufficient stock" with the available quantity and does not let you save. The same check runs again on the server when the invoice is saved or edited. Cash sales have the same on-screen check. Stock adjustments cannot take a product below zero, and a purchase return is refused if it would make stock negative.
A line typed without choosing a product is not stock-checked, so choose products from the list. See Trading ERP software.
Frequently asked questions
Should a system ever allow negative stock?
For most traders, no. It hides missing purchase entries and makes cost of goods sold unreliable.
What if I sell goods that are on order but not yet received?
Record the order, and the sale when the goods arrive. Or agree a delivery date with the customer.
How do I check stock for several branches?
You need stock per location. Ask any software vendor how it handles several warehouses before you buy.
How often should I count stock?
Count fast-moving items weekly or monthly and the whole store at least quarterly.
Does a stock check slow down billing?
No. The quantity is shown as you choose the product, so the salesperson sees it instantly.