stock-loss

---
name: stock-loss
description: Compares what your till says you sold against what actually left the store room, and produces a costed line-by-line list of the stock that cannot be accounted for. Use when the gross profit keeps missing, when a stocktake keeps coming up short, or before you accuse anybody of anything.
---

# Find out where the stock actually went, in pounds, before anyone gets blamed

You give this two stock counts with dates on them, the delivery invoices for the period between them, your till sales export, and your recipe or serve specifications. You get back one table: for every line, what the till says you should have used, what you actually used, and the difference in units and in pounds, sorted by money. Underneath it sits the list of losses you already know about and have recorded, subtracted line by line, so that the figure at the bottom is genuinely unexplained rather than merely uncounted. It never names a person. It produces the number that tells you whether there is something to investigate at all.

## What it does

1. **Close the period properly, because a sloppy count is the commonest cause of a fake variance.** You need an opening count and a closing count, each taken at a stated date and time, with the site closed and no deliveries in progress. Write both timestamps into the pack. Count every location: bar, cellar, store room, kitchen shelves, the chest freezer in the yard, the office cupboard with the spirits in it. A bottle in a location nobody counted is indistinguishable from a bottle that was stolen, and it will appear in your variance as a loss every period until someone counts it. ILTSA, the Institute of Licensed Trade Stock Auditors, which describes itself as "the UK's professional body for independent stock auditors", says that "Most hospitality businesses benefit from a monthly stocktake, but some choose bi-weekly or quarterly audits depending on their size, turnover, and control needs". Monthly is the right starting cadence, because a quarterly variance is too old to investigate and a weekly one is mostly counting error.

2. **Count in the unit you buy and convert to the unit you sell, and record both.** For every line record: the product, the pack as delivered, the unit you sell in, and the conversion between them. A 70cl bottle of gin sold in 25ml measures is 28 servings before any allowance for spillage; sold in 35ml measures it is 20. A 50 litre keg is 88 pints. A 5kg bag of chips at a 200g portion is 25 portions. Write the conversion factor on the line and keep it, because next period the same factor must be used or the variance is meaningless. Where the site pours 35ml as standard, record that explicitly: the permitted quantities for spirits such as gin, rum, vodka and whisky are "25 ml, 35 ml, multiples of 25 ml or 35 ml", and a bar that advertises 25ml and pours 35ml has a twenty-eight per cent loss built into its own price list rather than a theft problem.

3. **Build theoretical usage from the till, not from anybody's recollection.** Export every sale line for the period. Multiply each sold item by its recipe or serve specification to get the units of each stock line that should have left the shelf. A burger is a bun, a patty, a slice of cheese and a portion of chips, and each of those is a separate stock line. Where an item has no recipe attached, do not estimate one: list it under "sold with no specification" and total the retail value of those sales, because that figure tells the owner how much of their business is currently unmeasurable. This step is the one that makes the whole exercise work, and it is also the one people skip, which is why so many kitchens have a gross profit target and no idea which dish is missing it.

4. **Do the arithmetic in the open, one line at a time.** Actual usage equals opening count plus purchases minus closing count, with purchases taken from delivery invoices and matched to signed delivery notes. Variance equals actual usage minus theoretical usage. Cost the variance at the invoice price you actually paid in that period, excluding VAT, not at the retail price and not at last year's cost. Show all five numbers on every line: opening, purchases, closing, actual, theoretical, then the variance in units and in pounds. An owner who is shown only the final pound figure cannot tell a counting error from a loss, and will either dismiss the whole report or act on the wrong line.

5. **Subtract every loss you already know about and have written down, and name the ones you have not.** Recorded kitchen waste, staff meals, comped dishes and drinks, manager discounts, breakages, returned dishes, line cleaning losses, and samples poured for customers are all real stock that left with your knowledge. Each one must come off the variance with a document behind it: a waste sheet, a comp authorised in the till, a line cleaning log. What is left after those subtractions is the unexplained variance, and it is the only figure worth investigating. If any of those categories has no record at all, say so in one line each and put a value of zero against it, because a category recorded as zero because nobody writes it down is the single most common reason an honest site looks like it is being robbed.

6. **Check the measure before you look at any person, because the pour is usually the answer.** Draught beer, lager and cider must be sold in "1/3 pint, 1/2 pint, 2/3 pint, multiples of 1/2 pint", wine by the glass in "125 ml, 175 ml, multiples of 125 ml or 175 ml", and spirits in "25 ml, 35 ml, multiples of 25 ml or 35 ml". Measuring equipment must be government stamped, marked with a crown symbol, a CE mark or a UKCA mark. On brim-measure glasses, drinks must be "filled to the required level, having regard to the nature of the drink", and customers may ask for a top-up "to a reasonably acceptable level". So before anyone is spoken to: check the optics and the thimble measures are stamped and are the size the price list claims, check the glassware is the right line, weigh six standard pours and six standard kitchen portions against the specification, and check the beer line length and the cellar temperature. Record what you find as a measured figure. A free-poured spirit, an unlined wine glass and a 240g chip portion sold as 200g will each produce a large, consistent, entirely innocent variance.

7. **Check the till before you look at any person either.** Pull the exception report for the period: voids, no-sales, refunds, price overrides, discounts, training-mode transactions, and sales rung after close. Count them by operator and by hour, and compare against the variance by day. A stock loss with no matching cash loss points at the store room; a stock loss with a matching pattern of voids points at the till. HMRC treats the deliberate version of this as fraud: electronic sales suppression "is where a business manipulates their till systems to hide or reduce the true value or amount of sales", HMRC states plainly that "ESS is tax fraud", and the Finance Act 2022 powers carry penalties of up to £50,000 for making, supplying or promoting an ESS tool. That is why this step matters even for an owner who trusts everybody: if a till has functions that suppress sales, the owner is the one HMRC will be talking to.

8. **Rank by pounds, then prove it by repeating the count.** Sort the unexplained variance by cost, biggest first. Take the top five lines only. For each, write what the variance is worth per week, the three most likely causes in order, and the single cheapest test that would separate them. Then run the same count again over a shorter period, a fortnight or even a week, on those five lines only, with the measures corrected and the recording gaps from step 5 filled. A variance that survives a second clean count with accurate specifications and complete waste records is a real finding. A variance that disappears was a measurement problem, and finding that out costs a week and saves a relationship.

9. **If the evidence still points at a person, stop here and hand it to a fair process.** Do not confront anybody, do not search a locker, and do not put a name in this document. Acas is clear that "When there is a possible disciplinary or grievance issue at work, the employer should carry out an 'investigation'", and that "If the employer does not carry out a reasonable investigation, any decisions they make in the disciplinary or grievance case are likely to be unfair". It advises that "The employer should get somebody who's not involved in the case to carry out the investigation, for example another manager or someone from HR" so that "there is no conflict of interest", and that the investigation plan should set out what needs to be investigated, who is carrying it out, who needs to be spoken with, and "any sources of evidence, for example work records, emails or CCTV recordings". What this skill hands over is the evidence pack: dates, counts, costed variances, exception reports and the measurement tests, with no conclusion attached. The conclusion belongs to the investigation, and an owner who reaches it first has usually just made an unfair dismissal expensive.

## Then it checks

1. Both stock counts carry a date and a time, the list of locations counted is written down, and every location that holds stock appears on it.
2. Every line shows opening count, purchases, closing count, actual usage, theoretical usage, variance in units and variance in pounds, with the conversion factor between the buying unit and the selling unit printed on the line.
3. Purchases on every line trace to a delivery invoice number, and any invoice with no matching signed delivery note is listed separately rather than being included silently.
4. Every known-loss category (recorded waste, staff meals, comps, breakages, line cleaning) appears with either a document reference or an explicit "no record kept" and a zero value, and none is omitted from the table.
5. Sales lines with no recipe or serve specification are listed under their own heading with their total retail value, and they contribute nothing to the theoretical usage figure.
6. The measurement tests from step 6 appear as recorded figures, six weighed pours and six weighed portions with the specification beside each, and the pack states whether the measures are stamped.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is.
- Never name a person in this document, and never attach a cause to a variance line. The output is counts and pounds. The moment a name appears, the document stops being evidence and starts being an allegation, and it will be read out in a tribunal.
- Never treat an unrecorded loss as a theft. A site with no waste sheet and no comp log will always show a large unexplained variance, and the fix is a sheet on the wall, not an accusation.
- Never cost a variance at retail price. The business lost the cost of the goods, not the menu price, and a report inflated to retail values will be dismissed by anyone who checks one line of it.
- Never search a person, their bag or their locker, and never put a hidden camera in a staff area. Both are decisions for the owner with their HR adviser, and getting either wrong converts a stock problem into a legal one.
- This output is a working document prepared for the owner's accountant, stock auditor and HR adviser to check before it is used. It counts stock and states arithmetic; it is not evidence of wrongdoing by anybody and it is not employment advice.

## Built from
- Institute of Licensed Trade Stock Auditors (ILTSA), "Hospitality Stocktaking Services", https://www.iltsa.co.uk/hospitality-stocktaking.html, no publication date shown on the page, read 14 September 2026: the definition of what a hospitality stocktake covers and the monthly cadence recommendation that set step 1.
- Business Companion, "Selling alcohol in licensed premises", https://www.businesscompanion.info/en/quick-guides/weights-and-measures/selling-alcohol-in-licensed-premises, no publication date shown on the page, read 14 September 2026: the prescribed quantities for beer, wine and spirits, the stamped-equipment requirement and the rule on filling brim-measure glasses, which are the whole of step 6 and the conversion discipline in step 2.
- HM Revenue & Customs, "Electronic sales suppression" collection, https://www.gov.uk/government/collections/electronic-sales-suppression, read 14 September 2026, and HM Revenue & Customs, "New powers introduced as HMRC targets till fraud", https://www.gov.uk/government/news/new-powers-introduced-as-hmrc-targets-till-fraud, read 14 September 2026: the definition of electronic sales suppression, HMRC's statement that it is tax fraud, and the £50,000 penalty, which is why step 7 checks the till exception report before anything else.
- Acas, "Investigations at work", https://www.acas.org.uk/investigations-for-discipline-and-grievance-step-by-step and https://www.acas.org.uk/investigations-for-discipline-and-grievance-step-by-step/step-2-preparing-for-an-investigation, no publication dates shown on the pages, read 14 September 2026: the requirement for a reasonable investigation, the independent investigator and the investigation plan, which is what step 9 hands the pack over to and why no name appears in the output.

# stock-loss

## You are given
A folder for one UK hospitality site containing any of: two stocktake counts as CSV or spreadsheet (an opening and a closing count, each with a date and time), delivery invoices for the period between them, a till or EPOS sales export for the same period, a recipe or serve-specification file, and any waste, comp or line-cleaning records. Figures may be incomplete. Never estimate a missing one.

## Produce
Write these files into an `output/` folder beside the inputs.

1. `variance.csv` - one row per stock line. Columns: `line_id, product, supplier_code, buying_unit, selling_unit, conversion_factor, opening_units, purchases_units, closing_units, actual_usage_units, theoretical_usage_units, variance_units, unit_cost_gbp_ex_vat, variance_gbp, known_losses_units, unexplained_units, unexplained_gbp, invoice_refs`. Sort descending by `unexplained_gbp`.
2. `known-losses.csv` - columns: `line_id, product, category, units, gbp, document_ref`. `category` is one of `recorded_waste, staff_meals, comps, breakage, line_cleaning, samples, other`. A category with no records for the period still gets one row with `units=0` and `document_ref=NO RECORD KEPT`.
3. `unspecified-sales.csv` - every sold menu item with no recipe or serve specification. Columns: `item, quantity_sold, retail_value_gbp_ex_vat`. Include the total.
4. `till-exceptions.csv` - columns: `date, hour, operator_id, exception_type, count, value_gbp`. `exception_type` is one of `void, no_sale, refund, price_override, discount, training_mode, after_close`. Use an operator ID or terminal number, never a person's name.
5. `stock-loss.md` - one page. The total unexplained variance in pounds first, then the top five lines with the weekly cost of each, then the known-loss categories with no records kept, then the count of unspecified sales lines and their retail value.

## Rules
- British English. No em dash characters. Use " - " or a comma. No emoji.
- Never write a person's name, initials or nickname into any file. Operator IDs and terminal numbers only.
- Never write a cause, a theory or an accusation into any file. Counts, costs and dates only.
- Cost every variance at the invoice price paid in the period, excluding VAT. Never at retail price.
- Print the conversion factor on every row. If a line has no conversion factor, leave the theoretical columns empty and list the line in `stock-loss.md` as unmeasurable.
- If either stocktake has no date and time, write every file, leave the affected columns empty, and say so in the first line of `stock-loss.md`.

## Return
The absolute path of the `output/` folder, the total unexplained variance in pounds, the five largest lines by unexplained value, the number of known-loss categories marked NO RECORD KEPT, and a numbered list of every input you could not find.