Check on-hand stock by adding received quantities to the opening figure, subtracting shipped quantities, and comparing the result with the recorded figure.
Key takeaways
- Start from a physical count that you trust.
- Keep four figures for each item: opening, received, shipped, and recorded on hand.
- Check each delivery against the packing slip and your count.
- Write a reason for every adjustment, and have someone else review it.
Staff who count it and owners who read it both depend on it being right. This post follows one item from the moment it arrives to the moment it leaves, and shows four figures to check along the way. None of the steps depends on special software, though the same logic applies to any system that tracks quantities.
Start from a count you trust
The recorded quantity is only as good as the count it starts from. Before anyone can check a number after a delivery or a sale, the system needs a starting figure that matches the shelf. In a small operation, that figure usually comes from a physical count: someone walks the racks, counts each item, and writes down what is actually there. Everything that follows is built on that starting point, so it pays to take it seriously.
Odoo's guide, Average price on returned goods, begins from an empty record, so the stock starts at nothing: "Initially, the product stock is 0, so all values are $0." Once you know where you began, each later movement can be read as a change from a known position.
A full count is not the only kind of check. ERPNext defines stock reconciliation as "the process of counting and evaluating material/products, periodically at the year-end." Two points in that definition matter for daily work. The count is a planned activity, not a random one. And it looks at the physical material, not just the entries in the system. Between scheduled counts, your job is to keep the recorded figure honest one movement at a time.
Track four figures for every item
For each item you watch, keep four figures in view:
- The opening figure: what the record said was on hand before the movement.
- The received figure: what arrived and was put away.
- The shipped figure: what left to fill an order or go out for any other reason.
- The recorded on-hand figure: what the system says is on hand now.
The check is simple arithmetic. Opening, plus received, minus shipped, should equal the recorded on-hand figure. When the two sides agree, the record is consistent with the movements it logged. Agreement checks only the logged figures; finding miscounts, missed entries or unlogged losses requires comparing the record with a physical count or source paperwork. The arithmetic tells you whether the logged figures agree. It does not tell you why, so the next step is always to look at the source documents.
Check each delivery when it arrives
A delivery is the first place the record can go wrong. Staff count what came off the truck, compare it with the delivery paperwork, and enter the quantity into the system. Mistakes at this stage are easy to make and hard to notice later, because the wrong figure then becomes the base for every sale that follows.
Compare three things before you close a delivery: the quantity on the packing slip, the quantity you counted, and the quantity you entered. If the packing slip and your count differ, record what you actually counted and note the difference. Do not quietly enter the figure on the slip, because that would hide a short delivery.
The Odoo guide describes a first warehouse operation in which "8 tables are received at $10 each." The point for stock counters is not the price. It is that the received quantity is a specific, countable number, entered once, and then carried forward into the on-hand figure. If that number is wrong at entry, the error travels with it.
Also check the item itself. Confirm the item code, the unit of measure, and the location where it was put away. An accurate quantity recorded against the wrong item or the wrong bin still produces a figure that is wrong for the person who looks for it later.
Receiving is also the moment to notice damage. If an item arrives broken or unusable, count it separately and mark it on the paperwork before it is put away. Stock that goes onto the shelf unchecked will be counted as available by the next person who looks, and that figure will be wrong for every order taken until someone corrects it.
Check each sale before it leaves
Sales and shipments reduce stock, and they are where a recorded figure most often falls behind the shelf. A picker takes an item, the order is packed, and the shipment is recorded later. If the recording is delayed or skipped, the system will show more stock than exists.
Before a shipment leaves, confirm that the quantity picked matches the quantity on the order, and that the recorded movement matches both. Shipping quantities should be entered as they happen, not estimated at the end of the day.
The Odoo guide shows how an outgoing shipment appears in the record: "Because 10 tables are being sent out to customers, the incoming quantity is -10." Odoo records this shipment as -10; confirm the sign convention your own system uses. Reading the sign correctly is part of checking the record. Check that the shipment reduces the on-hand figure by the quantity shipped.
Shipping errors also tend to hide in plain sight. An order that was packed and sent but never logged leaves the record showing stock that is no longer there, and the next order picked against that figure may then be short. Checking the outgoing movement against the order's pick list catches this before a customer does.
Compare the recorded figure after every movement
After each delivery or sale, look at the recorded on-hand figure and ask whether it fits the movement you just made. If you received a delivery, the figure should be higher by the amount received. If you shipped an order, it should be lower by the amount shipped. A figure that moved the wrong way, or by the wrong amount, is a signal to stop and check before the next movement is recorded on top of it.
This habit is cheap. It takes little time for each movement, and it catches problems while they are still small and the source paperwork is still at hand. Waiting until a periodic count to notice a difference means the trail is harder to follow, because several movements have happened since the error began. A simple way to make the habit stick is to write the expected new figure on the delivery paperwork or pick sheet before you enter the movement, so the comparison happens every time rather than only when someone remembers.
Owners have a role here too. An owner does not need to count stock personally to check the record. Reviewing the recorded quantity after a delivery and after a sale, and comparing it with the paperwork that backs each movement, is a practical way to see whether the figures can be trusted. Ask for the movement history for any item where the on-hand figure looks wrong, and read it from the first entry forward. The pattern in that history often shows the cause faster than a fresh count does.
Illustrative example of the four figures
An illustrative item opens at 10 units. Another 10 arrive, and 10 ship. The expected recorded on-hand figure is 10: opening plus received minus shipped.
Walk through the same steps yourself. Start with the opening figure. Add the received figure. Subtract the shipped figure. Compare the result with the recorded on-hand figure. If they match, move on. If they do not, you have found a gap to investigate, and the four figures tell you where to look: the opening figure against the last count, the received figure against the packing slip, and the shipped figure against the order.
Explain every adjustment
Sometimes the recorded figure is wrong and the shelf is right, or the reverse. When that happens, you adjust the record. Zoho's inventory guide, Inventory Adjustments, notes: "You can also adjust the quantity or value of a single item." This is useful when you find one item that is off, but it is also where errors can hide, because an adjustment changes the record without a movement behind it.
So every adjustment needs a reason written down. Note the item, the old recorded figure, the counted figure, the difference, and what you believe caused it. A damaged item, a miscounted case, or an unrecorded transfer each gets a different note. An adjustment with no reason is just a new unexplained number, and the next person to check the record will have no way to trust it.
Set a rule that adjustments are reviewed by someone other than the person who made them. The owner, or a second staff member, should look at the note and the count before the change is final. This does not need to be a formal process. A short review, done as a routine, can help catch mistakes.
Use the inventory adjustment checks before changing a recorded quantity.
Use periodic counts to back up the daily checks
Daily checks help catch problems while movements are recent. Periodic counts catch the ones that slip through.
Choose the schedule to suit your volume and the value of your stock. A business that ships many orders a day needs counts more often than one that ships a few. The right frequency is the one that catches differences before they grow large enough to affect orders, and you can adjust it as you learn where your records are most likely to drift.
When you run a count, count the item, not the record. Walk to the location, count what is there, and only then look at the system figure. Counting against the screen invites the counter to see what they expect rather than what is on the shelf. Record the counted figure first, then compare.
Do not adjust the record to match a count you have not verified. If a count is far from the record, count again before you change anything. A second count costs little, while a wrong adjustment can hide a real problem and make it harder to find later.
If the second count agrees with the first, the difference is probably real, and it is time to look for the cause. If the two counts disagree with each other, the count itself needs more care. Either way, the record should not change until the count is settled.
For the count itself, follow the physical inventory reconciliation steps.
Learn the usual causes of a mismatch
When the on-hand figure and the shelf disagree, the cause is usually one of a few ordinary problems. A delivery was entered from the packing slip rather than the count. A shipment was picked but not recorded. An item was moved to another location and the move was not logged. Damaged goods were removed from the shelf without a note. Someone took an item for internal use. Find these differences through a physical count or a comparison with source paperwork; the logged figures can still agree arithmetically. The reason comes from the paperwork and from asking the people who handled the stock.
Keep a note of which cause turned out to be behind each difference. Over time, the pattern shows where your process is weakest. If most differences come from shipments recorded late, the fix is in the shipping step, not in another count.
Handle partial and short deliveries
Deliveries do not always arrive in one piece. Part of an order may come today and the rest later, or a supplier may send fewer units than the paperwork shows. In each case, the delivery entry should show what actually arrived, not what was ordered. Record the partial quantity, and leave the rest open until it arrives. This keeps the on-hand figure matching what is physically in the building.
When a delivery is short, write the shortfall on the paperwork and tell whoever handles supplier follow-up. A short delivery that is recorded as complete will show up later as a shelf shortage, and by then the supplier's records and yours will have drifted apart.
Record damaged and missing stock
Damaged stock is still stock until someone decides what to do with it. If an item is damaged but still counted on the shelf, it will look like available stock to the next person who checks. Set it aside, count it separately, and record it the way your system allows for damaged goods, so the available figure reflects what can actually be sold.
Missing stock is harder. An item that cannot be found after a reasonable search should not stay on the books indefinitely. Count the location, check the recent movements, and ask the people who worked the area. If the search fails, record the difference as an adjustment with a clear reason, and let the owner see it.
Keep the process simple enough to follow
A checking process only works if people follow it. Keep the steps short and write them down where staff can see them. The core is four figures, one comparison, and one rule: no movement is treated as finished until its recorded figure has been checked against the paperwork.
Train staff on the common mistakes. These include entering a delivery from the slip rather than the count, recording a shipment later than it left, using the wrong sign for an outgoing quantity, and adjusting a figure without writing down why. Each is easy to avoid once staff know to watch for it.
Make it easy to report a difference. Staff should feel free to say "the shelf does not match the record" without it being treated as a failure. A difference reported early is cheap to fix. One that is hidden is much harder to untangle, because the trail of movements grows longer every day it stays unreported.
A short end-of-day review helps here. At the close of each working period, someone compares the day's deliveries and shipments with the recorded on-hand figures for the items that moved. This helps find mismatches while the people who handled the stock are still there to explain them.
Divide the work between staff and owners
Staff who count stock are responsible for accurate counts and accurate entries. They should record what they see, flag differences, and never adjust a figure to match what the screen says. Owners are responsible for reviewing the record and deciding what to do when it does not match.
Both roles depend on the same four figures. When staff and owners use the same vocabulary, a conversation about a discrepancy goes quickly: which figure is wrong, and where the evidence is.
Check an item today
Choose an item that moved today. Compare its opening, received, shipped and recorded figures, then check the paperwork and count the shelf before making any adjustment.
Common questions
Does matching arithmetic prove the shelf count is right?
No, matching arithmetic shows only that the logged figures agree. Compare the record with a physical count and source paperwork to find unlogged movements or counting errors.
Must a shipment be entered as a negative number?
Use the sign convention your system requires. Confirm that the recorded movement reduces the on-hand figure by the quantity shipped.