In recent months, Capcon has undertaken an extensive research initiative to investigate the effectiveness of stock projections compared to actual stock values. Our research approach involved conducting two stock counts – one mid-month and another at the end of the month. The primary objective was to project mid-month stock values to the month’s end. The remarkable finding? The projected value from the mid-month count exhibited a minimal deviation of just 0.4% from the actual end-of-month value.
The Significance of our Findings
In the hospitality industry, which is marked by the downsizing of staff, end-of-period stock audits often strain already stretched resources. While stock audits primarily aim to provide a stock valuation, they also play a crucial role in guiding businesses toward enhancing profitability. Many businesses are deeply involved in the stock audit process, yet their profit margins often fall below their true potential.
Challenges in Operational Staff Involvement
Operational staff often face an escalation in their workload during the period-end window, making it challenging for them to actively participate in the stock auditing process. As auditors, we are fortunate to witness best practices across various businesses, and we are eager to share this valuable knowledge. However, this knowledge exchange becomes challenging when operational staff cannot actively participate in the stock auditing process.
Valuable Tips Based on Our Findings
- Opt for Efficient Stock Projection Techniques: Traditional stock valuation methods, such as end-of-period stock audits, can be time-consuming. Consider adopting more efficient projection techniques, such as Capcon’s approach. By projecting mid-month stock values forward to the period’s end, businesses can obtain a precise stock valuation for the last working day of the period, saving both time and resources.
- Promote Communication and Collaboration: Stock audits provide essential insights into managing risk effectively and maximizing profits. However, operational staff are often more occupied with tasks during the period end window, hindering active participation in the stock auditing process. Encourage open communication between staff and auditors to ensure that insights from stock audits are effectively utilized to enhance profitability.
Capcon’s Innovative Approach
Our innovative approach, involving the projection of stock valuations, offers a distinct advantage. With this method, businesses can swiftly obtain precise stock valuations for the last working day of the period, bypassing the customary 10-day period-end window. This not only saves valuable time but also equips businesses with real-time insights to make informed decisions.
Rethinking Traditional Methods
In the ever-evolving realm of stock management and financial performance, Capcon’s research underscores the importance of re-evaluating traditional stock valuation methods. By embracing projection techniques, businesses can steer their profitability towards greater heights while relieving the pressure on their staff during those crucial end-of-period audits.
We invite you to explore these possibilities with us, as together, we can redefine the future of stock valuation and profitability enhancement, ensuring that your business thrives. Please get in touch.