Today I want to talk about why a valuation is only the basics.

This time of year I’ve been very busy since January first, we’re doing a lot of valuations especially for clubs, so working men’s clubs, conservative clubs. The idea of this blog came out of a conversation I’ve had with two different venues. One was a conservative Club, they’ve got treasurer who is relatively new in post, she’s there part-time, it’s all run by part-timers, when I got there she was asking my advice.

I’ve done valuations there for two or three years but never had any interaction, what she wanted to know was whether the amount of stock on site was actually representative of a reasonable holding for the amount of business they do each week. The trouble was because I only do an annual valuation, I don’t know how much they take each week, so I had to ask her. So what I did was I counted the stock, I worked out the GP for them and I worked out how much the stock on site would raise if they meant to sell it all. That came to roughly £5,000 plus I think it was at retail, but she then told me that they were only taking about £1,600 a week including VAT. So my initial reaction to her was – yep you’re well over-stocked, you should only be using, you only need 10 days stock. She said that confirmed what she thought, so I wrote that along with some other recommendations for her to take to the next committee meeting, so that they have money in the bank rather than it all being tied up in the cellar with sock potentially going out a date.

The second one was a village club, again it was a new treasurer. He got all the information for me, again it’s one valuation per year they have normally, he asked at the end why do you only do a valuation once a year? I said well previously I’ve done quarterly stock takes, but I was told by your predecessor that the accountant had said no don’t bother with that just ask them for an annual valuation just for the management accounts on end of year accounts. He said – I think it be far better if we go back to quarterly stock takes, I’m going to speak to the committee, I want control, I want to know that the stock we’re getting in the business is actually going out as money always being quantified where it’s going.

That’s why I believe only having your annual stock valuation for your account is only the very very basics that you can have done. If you would like to know more of what full stocktaking can do, just drop us a line and I’m quite happy to have a free chat with you.