A stocktake (also called a physical inventory count) is the one day a year when a pharmacy finds out how accurate its records really are. It's tedious, it often means staying late or closing early, and the results can be uncomfortable.
It's also essential. Your accountant needs a stock valuation, controlled drug balances need verifying, and every variance you find is a clue to where money is leaking. This guide shows a small pharmacy how to run a stocktake efficiently, and how to make the next one much easier.
Why Stocktakes Matter
- Accurate accounts: closing stock value directly affects your reported profit and tax.
- Shrinkage detection: the gap between recorded and counted stock reveals theft, damage, and recording errors.
- Expiry discovery: counting by batch inevitably surfaces short-dated and expired stock.
- Compliance: controlled drug inventories have specific legal requirements, such as the DEA biennial inventory in the US and register balance checks in the UK and Australia.
- Better ordering: reorder points are only as good as the stock figures behind them.
Full Stocktake vs. Cycle Counting
| Approach | How It Works | Best For |
|---|---|---|
| Full stocktake | Count everything on one day | Year-end accounts, a new system baseline, change of ownership |
| Cycle counting | Count a small section each week on rotation | Ongoing accuracy without closing the store |
Most small pharmacies benefit from both: one full count a year for the accounts, plus weekly cycle counts that keep records accurate in between.
Before the Count: Preparation (1–2 Weeks Ahead)
- Pick the date and time. Quiet periods such as after close or a Sunday morning minimise disruption.
- Process all paperwork. Every delivery received, every return sent, and every invoice entered before the count. Unprocessed deliveries are the most common source of false variances.
- Tidy and map the store. Group products, label shelves with location codes, and decide on a counting route.
- Pull expired and damaged stock into a separate, clearly labelled area so it's counted separately rather than mixed in.
- Print or prepare count sheets by location, or set up handheld scanners.
- Assign teams. Ideally two people per zone — one counts, one records — with the pharmacist counting controlled drugs.
On the Day: Counting Rules
Freeze stock movement
Stop receiving deliveries during the count. If you must keep trading, record every sale during the count so it can be adjusted for.
Count by batch and expiry, not just product
A count of "24 × Amoxicillin 500mg" hides the fact that 8 of them expire next month. Record batch number and expiry for each group. This turns the stocktake into an expiry audit at the same time.
Count in the unit you sell
If you sell individual packs, count packs, not cartons. Count part-packs consistently, either as decimals or as individual units, and make sure everyone uses the same rule.
Controlled drugs separately
The pharmacist counts controlled drugs, ideally with a witness, and records the count against the legal register.
Don't look at the expected quantity
Counters should record what they see, not check it against the system figure. Blind counts are more accurate.
After the Count: Reconciliation
Compare counted quantities with system quantities and investigate variances in order of value, not order of size.
| Variance Cause | Clue | Fix |
|---|---|---|
| Unprocessed delivery | Large positive variance on one supplier's lines | Process invoices before counting |
| Sale scanned as wrong product | Matched + and − variances on similar items | Staff training, barcode scanning |
| Expired stock disposed but not recorded | Negative variance on short-dated lines | Record every write-off |
| Theft | Persistent negative variance on high-value, small items | Security review, restricted access |
| Counting error | Random small variances | Recount before adjusting |
Recount anything with a variance above your threshold (e.g. more than 5 units or $50) before making adjustments.
Then post the adjustments with a reason code. Medishelf records every adjustment in a full audit log with a timestamp and the user who made it, so next year's stocktake starts from an explainable history.
Valuing Your Stock
Most accountants want closing stock valued at cost. If you buy the same product at different prices, valuation depends on your costing method. Batch-level cost tracking gives the most accurate answer because each batch carries its own purchase price.
Medishelf's inventory value report shows total stock valuation at cost or at retail.
Making Next Year's Stocktake Easier: Cycle Counts
The best way to reduce stocktake pain is to keep records accurate all year. A simple cycle count programme:
- Split stock into A, B, and C classes by value (A = top 20% of products by value)
- Count A items monthly, B items quarterly, and C items twice a year
- Count 15–30 minutes a day, during a quiet period
- Investigate variances immediately, while the cause is still fresh
After six months of cycle counting, many pharmacies find their annual stocktake becomes a confirmation exercise rather than a discovery exercise.
Stocktake Checklist
- Date set and staff assigned
- All deliveries, returns, and invoices processed
- Shelves labelled and counting route mapped
- Expired and damaged stock separated
- Counts recorded by batch and expiry
- Controlled drugs counted by the pharmacist against the register
- Variances above threshold recounted
- Adjustments posted with reason codes
- Stock valuation sent to accountant
- Cycle count schedule started
Keep Stock Accurate All Year
Medishelf deducts stock automatically per batch on every sale, logs every adjustment, and reports stock value at cost or retail, so your stocktake starts from numbers you can trust.
- See our 7 practical inventory tips for chemist shops
- Explore inventory features
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