The monthly stock report: figures head office actually looks at

At month end the email arrives from head office: please report this month's stock. The local team of many Chinese-owned companies then spends two or three days polishing a table that keeps getting longer, and head office still asks why a figure rose so much since last month. What head office cares about is only a handful of numbers and why they moved. Putting them on one page and keeping the basis the same every month is worth far more than a detailed spreadsheet.

The five figures head office usually asks about

• Stock value: the month-end amount, split by main category, with the main reasons for the month's rise or fall.
• Days of cover: how many days the stock would last at the current rate of use, which shows how long money is tied up in the warehouse.
• Slow-moving share: the proportion of stock value that has not moved for a long time.
• Count differences: the net difference found in counts or spot checks this month, with the part that is explained and the part still being traced.
• Goods in transit: the value of goods shipped but not yet received, shown separately and not mixed into stock value.

How to calculate them

Take stock value from the books at the month-end cut-off, and state the date of the latest count so head office knows how fresh the figure is.

A common way to get days of cover is month-end stock value divided by average daily issue cost, where average daily issue cost is the issue cost of the last 3 months divided by the number of days.

For the slow-moving share, first decide what "not moving" means, for example no issue for 180 days, and then divide the value of qualifying goods by total stock value.

An invented example: month-end stock is 1.2 billion UZS, and issue cost over the last 3 months totals 1.8 billion UZS. Average daily issue cost is 1.8 billion ÷ 90 days = 20 million UZS, so days of cover are 1.2 billion ÷ 20 million = 60 days. Goods with no issue in 180 days are worth 180 million UZS, which is 15% of stock value. The month's count shows a net shortage of 24 million UZS, or 2% of stock value. Goods in transit are 350 million UZS, listed separately. (The figures are invented.)

For count differences, also show the gross figure, with surpluses and shortages added separately, because a net figure can hide offsetting errors.

Laying out the page

• The top line states the basis: cut-off date, currency, exchange-rate date and data source (a 1C export or Excel).
• The middle is one table of the five figures, each with columns for this month, last month and the same month last year, plus a column for the reason for the change, limited to a sentence or two.
• Below come two or three items needing a decision or attention from head office, such as a proposal for a batch of slow-moving goods.
• A note records any change of basis. Never change it quietly.

The reason for a change matters more than the number itself. "Stock rose by 120 million UZS" is a fact. "We stocked early for the spring project and expect to use it by June" is what head office wants to hear. If the reason is not yet clear, say "being checked" and state when you will answer.

Keeping the basis stable

When you report the same figures every month, a change of basis destroys the trend. Fix these in advance:

• the cut-off: which hour of the last day of the month;
• currency and exchange rate: UZS, USD or CNY, which date and which source, to be confirmed with finance;
• item grouping: how the main categories are split, unchanged from month to month;
• the definition of slow-moving, and the test for goods in transit;
• the data source: which system and which report, exported by whom.

If the basis must change, report one month under both the old and new basis so head office can see the effect. When someone new takes over the report, hand this checklist over with it, or the meaning of the numbers will drift with the person.

In short

The fewer the figures, the steadier they must be, and the steadier the basis, the more the trend can be trusted. UzWarehouse organises count data to head-office reporting requirements and supplies a reconciliation file by item code, which makes it easier to match head-office reports.