A physical stock verification checklist is the list of steps an owner follows to count what is really in each godown and match it with the book stock in Tally. It has three stages. Before the count, fix a cut-off at the last bill and goods receipt number, keep goods in transit apart, and give each stock group in each godown to one person. During the count, the counter works blind, without the book figure, and writes each quantity in the unit Tally uses for that item. After the count, recount only the items that look wrong, check what moved after the cut-off, value each difference at cost, make the entry in Tally, and find the cause before blaming anyone. A trader with two godowns and 1,200 items can cover everything in a year by counting one group a week. The printable checklist below has 18 points, six for each stage.
Key Highlights
- Count one stock group in one godown at a time, with one person responsible for each count, so a gap can be traced to a shelf and a person.
- The counter should not see the book quantity. A counter who can see what Tally says tends to write it down, and the shortage stays hidden.
- In the worked example, 6 of 120 items differ at first: after the recount, ₹4,860 short and ₹520 extra at cost, a net shortage of ₹4,340.
In This Article
- The printable checklist
- What is a blind count?
- How often to count
- Who counts and who checks
- A worked example: one group in one godown
- When the numbers do not match
- Valuing the difference and making the entry
- Before your CA or the bank comes
- Knowing what to reorder is a different job
- Where Takkada fits
- Further reading
- Frequently Asked Questions
The printable checklist
Before the count
- Pick one stock group and one godown. That is one count.
- Note the last invoice, delivery challan and goods receipt number entered in Tally. That is your cut-off.
- Keep goods in transit, goods sold but not picked up, and unentered returns in a separate, marked place.
- Check that every bill and transfer up to the cut-off is entered, with the right godown on each line.
- Choose the counter and tell them the unit for each item (box, piece, kg) as Tally holds it.
- Prepare a count sheet with item names and units only. Our physical stock verification format has the columns.
During the count
- Count shelf by shelf, in the order items sit, so nothing is counted twice.
- Write zero when an item is not there. A blank line is not a count.
- Open sealed cartons only where the carton count looks odd.
- Write anything on the shelf that is not on the list at the bottom of the sheet.
- Stop goods moving in or out of that godown during the count, or note each movement with its time.
- The counter signs the sheet with the date and time they finished.
After the count
- Put the counted figure next to the book stock at the cut-off and work out each difference.
- Recount only the items that differ, by someone who has not seen the first figure.
- Check each remaining gap against bills after the cut-off, wrong godowns and unit mix-ups.
- Value each shortage and excess at cost.
- Make the entry in Tally for what is still different, with the reason in the narration.
- Write down the cause of each large gap and fix the step that caused it.
What is a blind count?
A blind count is a count where the person counting does not know the book quantity. When the book figure is printed next to the item, a tired counter copies it for the hard-to-reach shelf, and the sheet matches Tally even when the shelf does not. A blind count is slower, because every item needs a real number, and for groups where shortages matter that time is well spent.
How often to count
There is no fixed legal frequency for a trader's own count. Ask your CA what suits your books.
| Kind of stock | A common rhythm |
|---|---|
| High-value or fast-moving groups | Every month, or one group a week |
| Groups with past shortages | Every month until the gap stops |
| Slow-moving groups | Once or twice a year |
| Everything | At least once a year, before the books close |
Who counts and who checks
The person who handles a stock every day should not also count it and check it. Give the count to someone else, and keep the checking with yourself or your accountant. With only two people, let them count each other's godown.
A worked example: one group in one godown
A spare parts trader counts the Spares group in the Main godown, 120 items. Six items differ from the book stock at the cut-off. The figures are an illustration.
| Item | Book | Counted | Difference | Cost rate | Value |
|---|---|---|---|---|---|
| Brake shoe set | 40 sets | 37 sets | -3 | ₹1,020 | -₹3,060 |
| Clutch plate | 18 pcs | 16 pcs | -2 | ₹650 | -₹1,300 |
| Spark plug | 150 pcs | 146 pcs | -4 | ₹125 | -₹500 |
| Fan belt | 30 pcs | 32 pcs | +2 | ₹260 | +₹520 |
| Air filter | 25 pcs | 24 pcs | -1 | ₹310 | recount matched |
| Engine oil 1 L | 60 cans | 58 cans | -2 | ₹420 | billed after cut-off |
After the recount and the cut-off check, two items fall away. Three items are short by ₹4,860 and one has ₹520 extra, a net shortage of ₹4,340 to explain.
When the numbers do not match
Most gaps are entry problems before they are theft. Go through the seven usual causes in physical stock not matching Tally before you speak to anyone about missing goods.
Valuing the difference and making the entry
Value each difference at cost, the rate the goods came in at. Tally's Physical Stock voucher takes the counted quantity and works out the gap; a Stock Journal takes the difference itself, with a rate. Both are in physical stock entry in Tally Prime, and the GST side of a shortage is in stock shortage and excess entry in Tally.
Before your CA or the bank comes
This count is your own check. A statutory stock audit is a separate job for an auditor or a firm the bank appoints, and a book stock counted through the year gives them less to question. For a company, CARO 2020 asks the auditor whether stock was verified at reasonable intervals and whether discrepancies of 10% or more in the aggregate for each class of inventory were dealt with in the books.
Knowing what to reorder is a different job
Counting tells you whether the books are right. Knowing what to buy before a shelf runs empty works from sales and book stock, without anyone counting shelves. For that job, see knowing what to reorder with Takkada.
Where Takkada fits
Check the book side first with godown-wise stock on your phone. For the count, Takkada's Physical Stock Count add-on gives one stock group in one godown to one person, who sees item names and units and never what the books say. Anything sold or moved after they submit is marked Moved after count, and you accept each difference or send one item back for a recount. See the physical stock verification for Tally page for the full flow and the stock count app page for the counter's side.
Further reading
- Physical stock entry in Tally Prime
- Stock shortage and excess entry in Tally
- A blind count sheet for each godown
- Seven causes of a stock mismatch
- Tally me physical stock kaise kare
- Dukan aur godown ka stock kaise check kare
- स्टॉक का भौतिक सत्यापन कैसे करें
Frequently Asked Questions
Q: How often should a trader do a physical stock count?
A: At least once a year before the books close, and more often for the groups that move fast or cost the most. Counting one group a week covers a 1,200-item godown over the year without stopping work. Ask your CA what rhythm suits your books.
Q: What is a blind count in stock taking?
A: A count where the counter does not see the book quantity. They get item names and units and write what is on the shelf. It stops the counter from copying the book figure, so a real shortage shows up.
Q: Who should do the physical stock count?
A: Someone other than the person who handles that stock every day, with the checking done by the owner or the accountant. If a figure looks wrong, a second person recounts that item without seeing the first number.
Q: Is a 10% stock difference allowed?
A: No percentage of difference is allowed as such for a trader: every gap is either explained or adjusted in the books. The 10% figure comes from CARO 2020, which asks a company's auditor to report discrepancies of 10% or more in the aggregate for each class of inventory. Check with your CA how it applies to you.
Q: What should I check first when stock does not match Tally?
A: Check entries before people. Look for invoices with the wrong godown, box and piece mix-ups, scheme quantity not entered, cash sales not billed and transfers not recorded. These usually explain most of the gap.
Takkada's Physical Stock Count add-on makes the stock journal for Tally when you approve a count: shortages go out of the godown and extra stock comes in, at the rates you approved, and it is sent to Tally through Takkada's Tally connector. Batch-wise items are counted but left out of the journal; adjust those in Tally by batch. Physical Stock Count is an add-on, priced by your partner. Ask them for the add-on price, or message us on WhatsApp and we will switch it on for your company.