Associated Stocktaking Services is the most experienced stocktaking firm in Western Australia. They have provided answers to some of the most common questions about stock and stocktaking.
“I don’t want that stuff; it’ll never sell”
Sometimes purchasers are reluctant to take on some stock which they consider to be particularly slow moving, or “dead” (not moving at all!).
The broker can suggest that they notarise their offer to exclude such items if they wish. However this needs to be done prior to acceptance. This can in turn discourage the vendor from selling his business since he will then be left with this excluded inventory, but without a business from which to sell it.
A workable solution may be found by calling us at Associated Stocktaking.
“What about old and damaged stock?”
As a purchaser you should not pay for stock that is damaged or out of date. Associated Stocktaking Services uses date codes to assist in determining saleability, however, you should be checking the stock yourself while the stocktake is in progress. This helps us to identify unsaleable stock and brings to our attention any items of stock you wish to query.
As a purchaser, you may have preconceptions about what is saleable and you should discuss this with the broker who may ask Associated Stocktaking to give them some guidelines.
“How much does it cost, and who pays for the stocktake?”
Unless otherwise arranged, both parties pay half each for the stocktaker which insures his independence. There is a standard schedule of fees, but this may vary with the business in question. Usually we like to view a business before quoting, but for some types of business which we do often (eg. newsagents) we can produce a competitive quote without viewing the business.
“What if there is too much stock?”
In cases where the stock total exceeds the estimate we suggest that the purchaser keep the extra stock. You may want to discuss this with the broker who may be able to organise the vendor to finance the excess if it is a large amount.
“When do we stocktake?”
A changeover stocktake will usually occur after trade on the day of business settlement. This may vary if both parties agree.
“How do I know the values are correct?”
As an independent party and with our experience in a wide range of businesses we are in a position to make an impartial assessment of the value of stock using various methods at our disposal.
We will also investigate any pricing queries by either the vendor or purchaser at any time before or during the stocktake and up to 7 days after stock figures are published.
“Who picks the stocktaker?”
As an independent party the stocktaker should not be seen to be working for one side, so using staff from the business or reps from suppliers is not usually encouraged.
The broker may recommend a reputable professional stocktaker that both parties will agree to before settlement.
“Can we do a ‘walk-in-walk-out’ deal?”
This type of transaction is not encouraged for a number of reasons.
Firstly, the purchaser cannot be sure of exactly how much he is paying for stock. Of course the vendor may have been conservative in his estimate, but there is no guarantee that stock hasn’t been removed prior to settlement.
Even stock which is already recorded on a computerised inventory control system can be readily audited to the purchaser’s satisfaction.
This is cheaper than our complete stocktaking service and allows purchasers to have an accurate opening stock value. Subsequent profit and loss calculations will then be more precise.
“What about freight?”
Country businesses will have paid freight to get their stock into store and vendors therefore need to be compensated for this when selling.
Associated Stocktaking uses accurate methods of calculating freight and can advise on any freight-related issue.
“How do I know if something is an item of Plant or Stock?”
Goods that are rented or hired such as video tapes are technically classed as plant and equipment items, not as stock. Items that are consumed in the course of trade e.g. till rolls, meto price marking labels, light globes etc. are classed as stock for a hand over. The purchaser pays for these items whether they are listed as plant or stock.
“Is there anything else I should know about stocktaking?”
There are many specific issues that arise with the various types of business that are too numerous to mention here that we are happy to discuss anytime with the broker or parties involved. We are always ready to help a broker with a question and our advice is free.