How do you count your shop stock on 31 December, and what do you do with differences?

At the end of each financial year you determine the value of the stock in your shop at that moment. Normally that is the cost price. That is what the Belastingdienst requires. How you arrive at that value is not laid down in law. A count per item around 31 December is the usual way in a shop to back up the value.

The count almost always differs from what the records say. That is normal. The work lies in explaining those differences: is it a counting error, a bookkeeping error, breakage, own use or theft? You process each kind of difference slightly differently, including for VAT.

In this article

1. Do you have to count your stock on 31 December?
2. How do you prepare the count?
3. How do you count on the day itself?
4. At what value do you put the counted stock on the balance sheet?
5. What do you do if the count does not match your records?
6. How do you book a stock difference?
7. What do you keep from the count?
8. Why does it pay to count during the year as well?

Do you have to count your stock on 31 December?

You must determine the value of your stock on the balance sheet date. The Belastingdienst says: at the end of each financial year you determine the value of the stocks present in your business at that moment (Belastingdienst, valuation of stock). If your financial year matches the calendar year, that is 31 December.

A legal duty to count item by item is not stated in those sources. But without a count the value is hard to back up. A till system keeps track of what should be there according to the books, not of what is really there. You only see stolen, broken or wrongly booked items when you count.

Your stock records are part of the records you keep for 7 years. Ondernemersplein lists stock among what you must keep for at least 7 years: all stocks and their value, if you buy and sell goods (Ondernemersplein, step-by-step plan for records).

How do you prepare the count?

Choose a moment when nothing comes in and nothing is sold, for example after closing on 31 December or before opening on the first working day of January. Then the count matches one till position and one purchasing position.

If you count a few days earlier or later, write down which deliveries and sales fall between the count and 31 December. With that list you work the count back to the balance sheet date. Without it, a delivery on 30 December is easily counted twice or not at all.

Set aside the items that are not yours or no longer yours. Think of items a customer has paid for but not yet collected, customers' repairs, returns already going back to the supplier, and consignment items, which remain the supplier's until you sell them.

Divide the shop and the stockroom into sections and make a count sheet for each section with item number, description and a box for the quantity. Preferably have two people count: one counts, the other writes it down or counts again.

How do you count on the day itself?

Count in units per item, not in money. Put the date, the section and the name of the person who counted on each count sheet. Strike through empty boxes, so it is clear later that they really were empty and not forgotten.

If you work with a scanner, print a list after counting or save an export with date and time. A number that only sits in the till system and was changed later is no longer a count. The Belastingdienst expects a checkout system to be able to report on corrections and on changes to master files, including their history (Belastingdienst, guide to a reliable checkout system).

Count expensive items and items that often go missing separately and twice. That is where most of the money in a difference sits. Also note damaged or unsellable items separately. You will need them later for the valuation.

At what value do you put the counted stock on the balance sheet?

At cost. As a rule that is what you paid for the item, excluding the VAT you deduct. The selling price does not count. Only for slow-moving goods, products that are hard to sell, may you use a lower value (Belastingdienst, valuation of stock).

If you trade in textiles, clothing, furniture or upholstery, fixed maximum percentages apply when writing down. They are set out in the Annual Profit Decree. If your purchasing, stock and sales records themselves show how slow-moving the items are, that outcome is decisive (Annual Profit Decree, Government Gazette 2023, 4100, part 2.2). How far you may write down is covered in separate articles on clothing and furniture.

For that valuation you need the count, and the date on which each item came in. So when counting, also note the season or delivery date for each item, if your till system does not keep track of it itself.

What do you do if the count does not match your records?

Count again first, then explain. Put the counted quantity next to the quantity in the records for each item and look at the biggest differences in money. Count those items again before you book anything. A big difference is often a counting error or a delivery that was in the wrong place.

Differences are the rule rather than the exception. Researchers looked at almost 370,000 stock records in 37 stores of one retail chain. Of those records, 65% were wrong: the number in the system differed from what was on the shelf. Counting during the year made the differences smaller, a complicated store made them larger (DeHoratius & Raman, 2008).

Then look for the cause of each difference. Common causes are a delivery that has arrived but was not booked, a return to the supplier that was not processed, a sale recorded on the wrong item, breakage or spoilage, items that you or your staff took for own use, and theft. Write down what you found for each difference.

Part will remain unexplained. That is usually theft, an error you cannot trace, or a combination. How you keep an eye on that part during the year and what it costs your shop is covered in the article on shrinkage and theft.

How do you book a stock difference?

You put the stock on the balance sheet at the counted value. You book the difference with the records as costs, preferably on a separate account for stock differences, so you can see it again every year. Errors you found, such as an unbooked delivery or return, you correct on the account where they belong.

For VAT the cause matters. You do not have to pay VAT on stolen goods, because you received nothing for them. You may still deduct the VAT on the purchase (Belastingdienst, VAT and theft). The Belastingdienst does not mention breakage and spoilage on that page. There is then no sale and so no proceeds to pay VAT on. That is an inference.

If you or your family took items for private use, that is a withdrawal. You then pay VAT on the purchase price of the item, if you deducted the VAT when buying it (Belastingdienst, withdrawals and free supplies).

What do you keep from the count?

Keep the count sheets or the dated export, the list of deliveries and sales around the count, the calculation of the value and the explanation of the differences. Together they show how you arrived at the amount on the balance sheet. You keep stock data for 7 years (Ondernemersplein, step-by-step plan for records).

Also keep the till reports on own use and on spoilage, shrinkage and breakage. The Belastingdienst lists them as exception reports that a reliable checkout system must be able to produce (Belastingdienst, guide to a reliable checkout system). They tie in with the differences you found in the count.

Why does it pay to count during the year as well?

Because a difference you find in March can still be corrected. In December nobody remembers which delivery was not booked. In the study of the 37 stores, regular counting went together with smaller differences in the stock records (DeHoratius & Raman, 2008). That is an association in one chain, not proof that it works that way in every shop.

A simple way is to count one or two sections a month, and the expensive items and the items that often go missing every month. Then the count on 31 December is less work and you are not caught out by one big difference at the end of the year.

Sources

• Belastingdienst, Valuation of stock in your business (Waardering van voorraad in uw onderneming), accessed 28 October 2026. belastingdienst.nl
• Ondernemersplein (Ministry of Economic Affairs), Step-by-step plan for keeping records (Stappenplan administratie onderhouden), section Keep your records for 7 years, accessed 28 October 2026. ondernemersplein.overheid.nl
• Belastingdienst, Guide to a reliable checkout system (Handreiking voor een betrouwbaar afrekensysteem), June 2023. odb.belastingdienst.nl
• State Secretary for Finance, Decree of 25 January 2023, no. 2022-11246 (Annual Profit Decree, Besluit Jaarwinst), Government Gazette 2023, 4100, part 2.2. officielebekendmakingen.nl
• Belastingdienst, Deducting VAT if you have lost goods or money through theft, accessed 28 October 2026. belastingdienst.nl
• Belastingdienst, Other forms of selling goods (Andere vormen van verkoop van goederen), section Withdrawals and free supplies of goods, accessed 28 October 2026. belastingdienst.nl
• DeHoratius, N. & Raman, A. (2008). Inventory record inaccuracy: An empirical analysis. Management Science, 54(4), 627-641. doi.org