Dealer Stock, Opening and Closing Stock Reports, and Schemes

When a dealer holds your stock, you effectively have a warehouse you do not control. You see the invoices when stock goes in. You rarely see what stays on the shelf, what expires and what quietly leaks into another territory. Dealer stock reports close that gap, and schemes, used well, give dealers a reason to share the truth.

Why dealer stock matters

• Demand is revealed by sell-out, not by what you invoiced.
• Accumulated stock leads to price cutting and expiry losses.
• Stock-outs lose sales and shelf space to competitors.
• Variance can indicate theft, damage, or sales outside the territory.

The simple stock equation

For each dealer and each product, in a period:

Opening stock + Purchases from you - Sales - Returns and damages = Expected closing stock

Then count the physical closing stock. The difference is the variance.

A hypothetical example, in cartons of a 100 g masala pack:

Item	Cartons
Opening stock (1 Bhadra)	60
Purchases from you	300
Sales to shops	270
Damaged, written off	5
Expected closing	85
Physical count	82
Variance	-3

A variance of minus 3 on 85 may be a counting or paperwork difference. A variance of minus 30 would deserve a conversation.

Running a stock count

1. Fix the day. Count on the last day of the month or the first morning of the next.
2. Use a checklist of products with pack sizes, so units are not mixed up (pieces, packs and cartons).
3. Record batch and expiry where relevant, particularly for food, dairy and pharma.
4. Count with a witness, ideally your officer together with the dealer's staff.
5. Photograph the shelves or godown, if your policy requires proof.
6. Submit and reconcile against the equation above.

Counting can be done by your field officer at the dealer's premises with a phone. Keep the process short: ten to twenty minutes for a typical dealer is reasonable.

Reading the numbers

• Closing stock rising faster than sales: accumulation. Hold back new primary orders until stock reduces.
• Closing stock low and falling: reorder risk. Check lead times, particularly in monsoon months when roads fail.
• Large unexplained variance: investigate.
• Old batches at the back: expiry risk. Recommend first-expiry-first-out and discuss clearing offers.
• Mismatch between sell-out and officers' booked orders: the dealer may be selling through channels you do not see.

Opening and closing stock for your own warehouse

The same equation applies to your depots. Keep stock movements as records, never overwritten totals: each receipt, issue, return and adjustment is an entry with date, user and reason. The balance is the sum of the entries. That makes unexplained changes obvious.

Schemes: what they are and how to design them

A scheme is a temporary incentive to move stock or reward performance. Examples:

• Slab rebate: extra margin if monthly sell-out crosses a threshold.
• Free goods: 1 carton free on 20.
• Display scheme: payment for a visible shelf.
• Quarterly dealer target bonus.

Design principles:

1. Write it down with the period, products, eligibility and calculation.
2. Tie it to verified sales, such as fulfilled secondary orders, not invoices alone.
3. Keep it simple. If the dealer cannot compute it in a minute, he will not trust it.
4. Set a budget and test the cost on last year's numbers.
5. Settle promptly. Late payment destroys the scheme's motivational value.

Hypothetical tiered example: a dealer earns a rebate on fulfilled secondary sales in a month.

Secondary sales in month (NPR)	Rebate
Up to 500,000	0%
500,001 to 1,000,000	1%
Above 1,000,000	1.5%

If the dealer sells NPR 1,200,000 and the rebate applies to the full amount, the payout is NPR 18,000. State clearly whether the rate applies to the whole amount or only the part above each slab.

VAT and accounting treatment

How to document and account for rebates, including the VAT effect, depends on your situation. Discuss with your tax adviser and keep each scheme's calculation as a supporting record. See IRD-compliant VAT invoices. A credit to the dealer ledger with a reference to the scheme is usually cleaner than informal cash.

Common mistakes

• No counts at all, relying on goodwill.
• Counting units inconsistently, such as mixing cartons and pieces.
• Paying schemes on invoiced purchases, which encourages stuffing.
• Complex schemes nobody understands.
• Not checking expiry, leading to write-offs and disputes.

A monthly dealer stock checklist

1. Schedule counts for all dealers.
2. Record counts with batch and expiry.
3. Compare to expected closing.
4. Explain variances over a threshold you set.
5. Review accumulation against primary orders.
6. Calculate scheme payouts from verified sales.
7. Approve and credit schemes to the dealer ledger.

Stock counts for perishable and expiry-sensitive products

For dairy, bakery, beverages and pharma, counting by batch and expiry matters as much as counting quantity. Add these checks to the monthly count:

• Record the earliest expiry date per product on the shelf and in the godown.
• Flag any stock with less than your agreed minimum remaining shelf life, for example one third of its life.
• Check storage conditions: temperature, damp, direct sun. Poor storage ruins product and causes disputes over returns.
• Verify the first-in, first-out order: older batches in front.

A short photo of the godown, taken at the count, serves as evidence if a later dispute arises.

Using stock data to plan primary orders

Stock counts are not only for control; they improve replenishment. A simple rule: compare closing stock with average monthly sell-out. If a dealer sells 270 cartons a month and holds 82, he has about 0.3 months of cover, roughly nine days. If your lead time is ten days, he is about to run out. If he holds 600 cartons, he has more than two months of cover and should not be given a fresh primary order. Quote cover in days when speaking with dealers; it is easy to understand.

When the dealer disagrees with the count

Disputes arise when the dealer says the count is wrong. Calm steps help: recount together, check the paperwork for unrecorded purchases and returns, and agree on the corrected number in writing. If your officer and the dealer count separately and then reconcile, it is harder for either side to be surprised.

A simple dealer stock count sheet

If you are starting on paper, a sheet like this works until you move to an app:

Product	Pack	Batch	Expiry	Cartons	Loose packs	Notes
Masala 100 g	Carton of 40	B-0912	2027-03	82	14	Two damaged cartons set aside
Masala 50 g	Carton of 80	B-0905	2027-01	30	0

Convert loose packs to cartons consistently, record the counter's name and the dealer's witness, and file the sheet with the month's paperwork.

How often to review schemes

At the end of each scheme period, calculate the cost and the extra sell-out it produced. Compare with the same period before. If the scheme rewarded sales that would have happened anyway, it is a cost, not an investment. Keep the schemes that move products you want to push, such as new pack sizes or slow regions, and drop the rest.

How gamitrack handles it

gamitrack records stock as append-only movements per depot, batch and expiry, so levels are always the sum of what came in and went out, with low-stock and expiry alerts. For dealers, monthly stock counts show expected closing against the counted closing and highlight variance. Schemes apply to fulfilled secondary sales with tiered rewards, and approved rewards credit to the dealer ledger.

You can try this with a couple of dealers: start a free trial. See also primary vs secondary sales and our beverages and bakery and confectionery pages for perishable categories.

Key takeaways

• Expected closing = opening + purchases - sales - returns and damages; count and compare.
• Investigate variance and accumulation monthly.
• Tie schemes to verified sell-out, keep them simple and pay them on time.
• Record stock as movements, not overwritten totals.