The last working day of the month
Stores staff count the chillers with a clipboard at six in the morning before production starts. Someone estimates what is half-made in the high-care area. Finished goods in the despatch chiller are counted pallet by pallet. The sheets go to accounts, who type them into a spreadsheet, look up a price for each line, and try to work out why the gross margin has moved.
By the time the numbers are ready, it is the middle of the following month, and the management accounts are describing a factory that has already moved on.
Why valuation is so manual
The quantities and the prices come from different places, and neither is kept up to date between counts. Ingredients are booked in on paper delivery notes. Production usage is estimated from recipes, not recorded. Finished goods move out daily. Each month-end starts almost from scratch.
- Count sheets are printed lists that miss new ingredients.
- Part-used sacks, tubs and rolls are counted by estimate.
- Ingredient prices are looked up from the last invoice by hand.
- Work in progress is a judgement call with no record behind it.
- Finished goods costs come from costing sheets that may be out of date.
What slow month-ends cost
Late management accounts mean decisions made on old numbers. Unexplained stock movements eat hours of finance time. Write-offs appear as a lump at month-end instead of when they happened. And the business never quite knows whether a margin swing is real or a counting difference.
The stock view we build
- Goods-in is recorded on a tablet against the purchase order, so ingredient and packaging quantities are added as they arrive.
- Production usage is recorded from the production records, either as recipe usage for each batch or as actual issues from stores, depending on how your site works.
- Finished goods are added from production output and removed at despatch.
- Each item is valued from current purchase prices in Sage, Xero or your ERP, and finished goods from your recipe costing.
- At month-end, count sheets are generated from the live list, so new items are never missed, and counts are entered on tablets in the chiller.
- Differences between the system figure and the count are listed by item and value, and the finished valuation is exported for the accounts team to review and post.
| Stock type | Quantity from | Value from |
|---|---|---|
| Ingredients | Goods-in less usage | Current purchase prices |
| Packaging | Goods-in less usage | Current purchase prices |
| Work in progress | Open batches | Recipe cost to that stage |
| Finished goods | Output less despatch | Recipe costing |
A month-end that checks rather than builds
Counts are quicker because the sheets are correct and the entry is done in place. Finance reviews a valuation and a list of differences, rather than building one from nothing. Differences are visible by item, which points at where stock is really going, whether that is waste not recorded, yield loss or a booking error.
Your accountant or auditor gets a clearer trail as well. Each figure in the valuation traces back to goods-in records, production records and despatches, with the prices used and the date they were taken, so year-end stock work starts from something they can test rather than a spreadsheet that only one person can explain.
Mid-month questions get answered too. If the chiller looks full, or a supplier asks about a large order, the stock view shows the position without waiting for the next count.
Is this your month-end?
- Month-end stock is counted on printed sheets and typed up.
- Prices for the valuation are looked up by hand.
- Work in progress is an estimate with nothing behind it.
- Management accounts arrive weeks after month-end.
- Nobody can explain stock differences item by item.