Share this post

As we are approaching the year end stock takes for business which maintain stock is a must.

As per Circular 2011/3 issued on 11 July 2011 by the Tax Department all Cyprus businesses which maintained are obligated to carry out stock takes.

The Tax Department has the right to request the results of the stock take if considered necessary.

For a successful stock take the following procedures must be followed:

  1. Appoint one person to control the whole operation.
  2. Plan ahead and prepare a stocktaking program to make sure that the necessary resources are in place so things can run smoothly.
  3. A proper cut-off time, inventory report, stocktaking sheets or other documents will need to be prepared in advance.
  4. Appoint a supervisor in each location responsible for overviewing the process.
  5. All the staff to take part in the stocktaking must be instructed and briefed beforehand on their respective duties prior to the date of the stocktaking.
  6. Teach the staff the best system to count stock such as:
    • All inventory should be accessible and sorted into categories.
    • Always conduct a stocktaking in a tidy and orderly environment. e.g. each pallet should have one type of product.
    • After the end of the last working date before the stocktaking, no more issues (deliveries) should be made and no more receipts recorded in the system until the stocktaking is completed. The number of the last issue and receipt should be noted and all documents (purchase invoices, sale invoices, inter-store transfers), up to and including these numbers should be posted in the system. At this point no further postings should be made until the results of the stocktaking have been entered into the system.
    • Stocktaking sheets should be issued to the staff doing the stock-taking.
    • The stocktaking sheets should be under the control of one person only.
    • The stocktaking sheets should be consecutively numbered.
    • No duplicates of stocktaking sheets should be allowed and at the end of the stocktaking all stocktaking sheets must be accounted for.
    • Count all normal stock including loose packages and items under inspection.
    • Damaged stocks should be recorded separately.
    • While stocktaking is in progress do not have the warehouse open for normal business operations.
    • If the company holds stock on behalf of third parties, this should be kept in a separate place and not to be counted for.
    • Limit noise and conversation, distractions from co-workers, mobile phones, I-Pods or having the radio playing, can all lead to staff making critical errors.
    • Always running from top to bottom and left to right to avoid count duplications.
    • Count every item, never estimate and always check that the number listed is actually what is inside any unopened box.
    • Each row of shelves in the warehouse should be numbered and the number to be marked in chalk on the floor.
    • Mark any items counted to avoid duplication – this will also help identify any item that counters have missed.
    • Use coloured labels to mark bays as “counted ”.
  7. Choose the quietest time of the day-normally after hours-so that you have minimum interruptions.
  8. After the stocktaking is completed all the stocktaking sheets are collected by the person in charge. All the stocktaking sheets should be signed by the stock takers and the person in charge.
  9. The results of the count sheets should be entered into the system by an other person not the person in charge of the stocktaking and compare item by item to see if there are any discrepancies. The items which show large discrepancies have to be recounted immediately and all the discrepancies to be investigated and adjusted in the system.
  10. Finalize the stocktaking and investigate and note any inconsistencies.
  11. When finalization is completed review your stocktaking procedures and note any suggestions to further streamline actions and improve your processes for the next count.



Author: Michael A. Mitas (FCCA) – Michalis is specialised in complex audit engagements for groups of Companies including Consolidated Financial Statements at D Marinou & Co EST 1988 offering a range of corporate services including company incorporation, audit, vat and tax planning in Cyprus companies and international Clients.

Have any questions?

Fill in your details and we will be happy to assist

    Your Name (required)

    Your Email (required)


    Your Message