TL;DR
A year-end stocktake is a full count of the stock you own, checked against your records and valued for your accounts. The figure feeds straight into cost of sales and profit.
Most count-day problems start as paperwork problems. Post every receipt, delivery and return before you count, and agree in advance how to treat goods in transit, consignment stock and returns.
Count blind, in pairs, by location. The people counting should never see the system quantity.
Investigate big differences before you adjust anything. A plus on one item and a matching minus on a similar item is usually a picking error, not lost stock.
Value stock at the lower of cost and net realisable value. Damaged, expired and slow-moving items are where write-downs hide.
Free assets below: a four-week countdown, a printable count sheet, a variance log and a 12-point Stocktake Readiness Checklist.
It’s the last working afternoon of the year. Two people are standing in front of the same shelf, counting the same cartons for the third time. The system says 240. The shelf says 212. Someone thinks a delivery went out on the 29th without the paperwork. Someone else thinks the cartons on the top row hold 12 pieces, not 10.
Nobody is going home until the number makes sense.
If you have lived through a day like that, this guide is for you. A stocktake will never be fun. But most of the pain on count day is created weeks earlier, and most of it can be removed before anyone picks up a clipboard.
What is a year-end stocktake?
A year-end stocktake is a full physical count of the inventory your business owns at the end of its financial year. You compare the count with your records, investigate the differences, correct the records and put a value on what is left. That value becomes closing stock in this year’s financial statements and opening stock for the next.
Why the number matters more than it looks
Closing stock sits on the balance sheet, but it also decides your profit. Cost of sales is opening stock plus purchases, minus closing stock. So every dollar of stock you overstate at year end becomes a dollar of profit you overstate, and the error flips into next year’s figures. Here is an illustrative trading company:
| Stock counted correctly | Stock overstated by S$20,000 |
Opening stock | S$80,000 | S$80,000 |
Add: purchases | S$400,000 | S$400,000 |
Less: closing stock | (S$95,000) | (S$115,000) |
Cost of sales | S$385,000 | S$365,000 |
Effect on profit | Correct | S$20,000 too high this year, and next year’s profit S$20,000 too low |
And stock records drift more than most owners expect. When researchers Nicole DeHoratius and Ananth Raman examined nearly 370,000 inventory records across 37 stores of one large retailer, 65% did not match what was physically there (Management Science, 2008). That business had computerised stock systems. Your own rate may be far lower. The useful lesson is that records drift quietly until something forces a check, and for many SMEs the year-end count is that check.
What the law and your auditor expect
Records that explain your numbers. Under section 199 of the Companies Act 1967, a company must keep accounting records that explain its transactions and financial position and allow true and fair financial statements to be prepared, and keep them for at least five years from the end of the financial year. Your count sheets, variance log and adjustment approvals are part of the evidence behind your stock figure, so file them with your year-end records.
If you are audited and stock is material, your auditor will normally attend the count to observe how it is done and make test counts. This is required by SSA 501, one of the Singapore Standards on Auditing) issued by ISCA, unless attendance is impracticable. Tell your auditor your count date early.
If your company is audit-exempt, under ACRA’s small company rules, exemption removes the auditor, not the need for a stock figure you can stand behind. Your accountant will still ask for it, and the records rule above still applies.
When should you count?
Count as close to 31 December (or your own year-end date) as you can: ideally after the last delivery goes out and before the first one of the new year comes in.
If you have to count earlier, say on a quieter day in the last week of the year, keep a record of every receipt and delivery between the count and the year end, so you can roll the count forward to the year-end date. The bigger the gap, the more you will have to reconcile, so keep it to days rather than weeks.
If you can’t stop trading, count by zone: freeze one area, count it, release it, then move to the next. And if you count your fastest-moving items every month during the year, far fewer surprises will be waiting in December.
The four-week stocktake countdown
Work back from your count date. Each step removes a problem you would otherwise meet on the day.
Four weeks before
Fix the count date and the cut-off moment. For example, “after the last delivery order on 31 December”. Tell customers and suppliers if deliveries will pause.
Name a count supervisor who will not count. Their job is to hand out sheets, answer questions, check nothing is missed and do spot recounts.
List every place you hold stock: shop floor, back room, warehouse, vans, a third-party warehouse, and anything sitting at customers on consignment. Give each location a short code.
Two weeks before
Tidy and segregate. Put like items together. Move damaged and expired stock to a marked quarantine area. Label anything you are holding for someone else as “not ours”.
Clear the paperwork backlog. Post every goods received note, delivery order, customer return and stock transfer that has happened so far. Unposted paperwork is the most common reason a count disagrees with the system.
If you are audited, confirm the auditor’s attendance and send them your count instructions.
One week before
Prepare numbered, blind count sheets for each location, listing items but not system quantities. (A layout is below.)
Confirm the unit of measure for every item: piece, box or carton, and how many pieces are in each carton. Print it on the sheet.
Ask third parties for written confirmation of the stock they hold for you, as at the count date.
Count day
Freeze stock movements and write down the last delivery order and goods received note numbers issued before the count. That is your cut-off evidence.
Count in pairs. One person counts, the other records and checks. Tag each location as it is finished so nothing is counted twice or missed.
Collect every sheet. Because they are numbered, the supervisor can see at once if one is missing. Spot-check a few locations with a recount.
After the count
Compare, recount, investigate, approve, then value. Recount the big differences first, find causes where you can, get a manager to approve adjustments, and only then put a value on the stock.
Cut-off: the seven situations that cause most arguments
Cut-off is about one question: on the count date, whose stock is this? Agree the answers with your accountant before the count, not after.
Situation at year end | Whose stock? | What to do |
|---|---|---|
Goods received, supplier invoice not yet in | Yours | Count it. Make sure the purchase is recorded or accrued so stock and cost are in the same year. |
Supplier invoice in, goods not yet arrived | Depends on the delivery terms | If ownership has already passed to you under the purchase terms, include it as goods in transit; if not, leave it out. |
Goods delivered to the customer, not yet invoiced | Theirs | Don’t count it. Raise the invoice in the same year as the delivery. |
Goods invoiced but still in your store, waiting for collection | Usually theirs | Segregate and label it so it isn’t counted. Check the agreement with the customer. |
Stock you hold for a supplier on consignment | The supplier’s | Exclude it from your count, but list it so the supplier can confirm. |
Your stock held at a customer or third-party warehouse | Yours | Include it using a written confirmation from whoever holds it. |
Customer returns not yet inspected | Yours once accepted back | Count them separately and record their condition before deciding whether they can be resold. |
Delivery terms such as Incoterms set when risk passes between buyer and seller. When ownership passes is usually settled by your contract, so if you are unsure about goods in transit, check the purchase or sales terms rather than guessing.
Counting that holds up
Count blind. People who can see the system quantity tend to “find” it. A blind count tells you what is really there.
Count by location, not by item. Finish a shelf, bay or room, tag it, and move on. Searching the whole site for one product is how items get counted twice.
Write the unit of measure next to every quantity. “12” means very different things in pieces and in cartons.
Record condition as you go: good, damaged or expired. It saves a second walk-round when you value the stock.
Don’t fix numbers on the floor. Write what you see. Corrections happen afterwards, with a reason and an approval.
Use pen, cross out (don’t erase), and sign each sheet. It sounds old-fashioned, but it gives your accountant and auditor a clear trail.
Printable count sheet layout
Copy this layout into a spreadsheet or document, one sheet per location, with sheet numbers printed in advance.
Sheet | Location | Item code | Description | Unit | Counted qty | Condition | Counted by | Checked by |
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001 | WH-A1 |
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001 | WH-A1 |
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001 | WH-A1 |
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How to investigate stocktake variances
Before the count, decide what counts as a “big” difference worth a recount, for example anything over 5% of the quantity or over S$500 in value. Pick thresholds that suit your stock. Have a different pair do each recount. Then look for patterns before assuming stock has gone missing.
Pattern you see | Likely cause | What to check |
|---|---|---|
A plus on one item and a matching minus on a similar item | Wrong item picked, delivered or received | Recent delivery orders and goods received notes for both items |
A difference that is an exact multiple of a carton (12, 24, 48) | Unit of measure mix-up | How the last receipt was entered: pieces or cartons |
Count higher than the system | Receipt or customer return not posted | Unposted goods received notes and returns |
Count lower than the system | Delivery not posted, damaged stock thrown away unrecorded, or loss | Delivery orders, write-off records; repeat losses on the same items need a closer look at access |
A big difference in one location only | Stock moved during the count, or a location missed | Recount the whole location, and check the tags |
Variance log
Keep one line per item with a difference above your threshold. It becomes your approval record and next year’s list of problem items.
Item | System qty | Counted qty | Diff. | Unit cost | Value of diff. | Recount? | Cause found | Approved by |
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Only adjust the system once you have found a cause, or once a manager has signed off the difference you can’t explain. A difference that is quietly adjusted away this year tends to come back next year.
Valuing what’s left: lower of cost and net realisable value
Once the quantities are right, they need a value. Singapore’s financial reporting standards for inventories follow the international standard, IAS 2, and the core rule fits in one line: stock is measured at the lower of its cost and its net realisable value.
Cost is what it took to bring the stock to its current place and condition: the purchase price plus costs such as freight in and import duty.
Your cost formula must be applied consistently: first-in, first-out (FIFO) or weighted average for interchangeable items, or the actual cost of each item where items aren’t interchangeable. Last-in, first-out (LIFO) is not permitted.
Net realisable value is what you expect to sell the item for, less the costs still needed to complete and sell it.
Here’s how a write-down works. Say you hold 150 units of a product that cost S$40 each. A newer model has arrived, and you now expect to sell the old ones for S$35, with S$3 of selling costs per unit.
| Per unit | 150 units |
|---|---|---|
Cost | S$40 | S$6,000 |
Net realisable value (S$35 − S$3) | S$32 | S$4,800 |
Value to use (the lower) | S$32 | S$4,800 |
Write-down | S$8 | S$1,200 |
Write-downs hide in four places, so walk through these before you finalise: items with no sales for a long time (12 months is a sensible prompt), expired or nearly expired stock, damaged items, and models that have been replaced. How much to write down is a judgement, so agree the approach with your accountant or auditor.
The Stocktake Readiness Checklist
Run through this with whoever handles stock and accounts two weeks before your count. Anything you can’t tick is where count day will go wrong. Feel free to share or link to it.
# | Check | Why it matters |
|---|---|---|
1 | Count date and cut-off moment agreed and communicated | Everyone knows which deliveries fall in which year |
2 | Every stock location listed, including third-party warehouses, vans and consignment | Missed locations are missed stock |
3 | A count supervisor named who is not counting | Someone is free to spot problems |
4 | All receipts, deliveries, returns and transfers posted up to cut-off | The main cause of false variances |
5 | Treatment of goods in transit and consignment agreed with your accountant | Avoids arguments after the count |
6 | Damaged, expired and customer-owned stock segregated and labelled | Stops it being counted as good stock |
7 | Numbered, blind count sheets prepared for every location | Missing sheets are obvious; counts are honest |
8 | Unit of measure confirmed for every item | Prevents carton-versus-piece errors |
9 | Auditor attendance confirmed (if audited) | Avoids a recount in January |
10 | Recount thresholds set before counting starts | Decisions are made calmly, once |
11 | Variance log ready, with a named approver for adjustments | No silent write-offs |
12 | Count sheets, variance log and approvals filed with year-end records | Evidence behind your stock figure |
Scoring: 11–12 ticks, you’re ready. 8–10, fix the gaps this week. 7 or fewer, consider a trial count of one zone first, or moving the date.
Can a spreadsheet handle a stocktake?
Honestly, sometimes. If you carry a few dozen items in one location and one careful person keeps the sheet up to date every day, a spreadsheet and the layouts above will get you through.
It starts to struggle when:
You can’t say what stock you had on a past date, only what the sheet says now.
Quantities live in one file and stock values are worked out in another.
Adjustments made after the count never reach the accounts, so the books and the stock list drift apart again from 1 January.
More than one person, location or sales channel touches the same items.
Each year’s count takes longer than the last, and the unexplained differences don’t shrink.
If that sounds familiar, our guide to moving off old desktop accounting software covers how to switch systems without losing your history. And if a lot of your cash is tied up in slow stock and slow payers at the same time, the 30-60-90 day playbook on late payments covers the receivables side.
The best day to change how you track stock
Right after a full count, you know exactly what you have and what it is worth. That makes the first day of a new financial year the cleanest possible starting point for a new system: your counted closing stock becomes your opening stock, with no history to untangle.
AveriWorks is a cloud accounting and ERP platform built for Singapore businesses. Here’s what it does for the problems in this article:
Stock take built in. Record your counts, review the differences and post the adjustments. Like every stock movement in AveriWorks, adjustments post their cost to the ledger, so stock and accounts stay in step.
Perpetual valuation. Every receipt, delivery, transfer and adjustment is costed by FIFO or weighted average as it happens, and the stock valuation report ties to inventory on the balance sheet.
Find problems before count day. Stock balance, activity and aging reports show slow movers and odd movements while there’s still time to act.
Units, locations and transit. Per-unit-of-measure pricing, transfers between outlets and goods in transit, so “where is it?” has an answer.
Batch, serial and expiry tracking on the Enterprise plan, for stock where the lot matters.
Closed years stay closed. Period locks stop anyone posting into a year you’ve finished.
Bring your count with you. A guided import wizard loads your items and opening stock from CSV or Excel.
Plan | Stock features |
|---|---|
Starter (free) | Accounting, sales orders, InvoiceNow and GST InvoiceNow. Inventory is not included. |
Business | Inventory, stock take, stock transfers and journals, FIFO or weighted-average costing, stock reports and the data import wizard |
Enterprise | Everything in Business, plus batch, serial and expiry tracking, low stock alerts, stock forecast and per-item cost method |
Plan contents are from the AveriWorks pricing page as of 1 November 2026. Check the pricing page for current prices and features.
Start the new year from a number you trust
Business and Enterprise both come with a 7-day free trial. Do your count, then start a free trial in the first week of the new year and import your counted stock as opening balances. Or open a free Starter account for accounting and InvoiceNow, and add inventory when you’re ready.
Frequently asked questions
When should a company do its year-end stocktake?
As close to the financial year end as possible, ideally after the last delivery of the year and before the first of the next. If you count a few days early, record every movement between the count and the year end so you can roll the count forward. Keep that gap to days rather than weeks, because every movement in between is something you have to reconcile.
Does an audit-exempt company still need a stocktake?
Audit exemption removes the auditor, not the need for accurate accounts. Under section 199 of the Companies Act, every company must keep records that explain its financial position and allow true and fair financial statements, and stock is part of that. A year-end count is the most direct way to support your closing stock figure, and your accountant will usually ask for it.
What is a blind count?
A blind count is a stocktake where the people counting don’t see the quantity your system expects. They record what is physically there, and the comparison happens afterwards. It prevents the natural tendency to “find” the expected number, so differences show up instead of being hidden.
How do I treat goods in transit at year end?
It depends on when ownership passes under your purchase or sales terms. Goods you have bought that already belong to you should be included in stock even if they haven’t arrived. Goods you have sold that already belong to the customer should be left out. Agree the treatment with your accountant before the count.
What should I do with damaged or expired stock found during a stocktake?
Count it separately and record its condition. Then compare its cost with what you can realistically sell it for, less selling costs. If that net realisable value is lower than cost, write the stock down to that amount. If it can’t be sold at all, write it off, and keep a record of the approval and how it was disposed of.
Sources
DeHoratius, N. and Raman, A., “Inventory Record Inaccuracy: An Empirical Analysis”, Management Science 54(4), 2008: https://doi.org/10.1287/mnsc.1070.0789
Companies Act 1967, section 199 (accounting records and retention), Singapore Statutes Online: https://sso.agc.gov.sg/Act/CoA1967
ACRA, Audit exemptions: small company concept: https://www.acra.gov.sg/manage/companies/legal-requirements-common-offences/preparing-financial-statements/audit-exemptions/
ISCA, Singapore Standards on Auditing, including SSA 501 Audit Evidence – Specific Considerations for Selected Items: https://isca.org.sg/standards-guidance/audit-assurance/standards-and-guidance/singapore-standards-on-auditing-(ssas))
IFRS Foundation, IAS 2 Inventories: https://www.ifrs.org/issued-standards/list-of-standards/ias-2-inventories/
AveriWorks pricing and plan comparison: https://averiworks.com/pricing
Accuracy note
This article is accurate as of 1 November 2026. Legal and standards references are to the Companies Act 1967, ACRA’s published audit exemption rules, the Singapore Standards on Auditing and the inventories standard as they stood on that date; ACRA announced a review of its audit exemption framework in February 2026, so check ACRA’s page for the current position. The research figure comes from one large retailer and is not a forecast for any business. All company figures, thresholds and write-down amounts are illustrative. AveriWorks plan features may change; check the pricing page for the current version. This article is general information, not accounting, audit or legal advice; agree year-end treatments with your accountant or auditor.