How to do a physical count of stock in a junkshop

A physical count means weighing what is actually in your yard, material by material and location by location, and comparing it with what your records say should be there. Pick a cutoff, stop buying and moving stock, weigh every pile, bin and bale with its tara, write the kilos on a count sheet, then compute the variance in kilos and in pesos at average cost.

Done regularly, a count tells you where kilos disappear: moisture, sorting mistakes, unrecorded purchases, loose handling or theft. Done once a year, it only tells you that they disappeared. This guide covers how often to count, how to set up the day, how to weigh each kind of pile, and what to do with the numbers.

Why does the stock in the book differ from the yard?

Your book stock, or expected stock, for each material is simple arithmetic: what you had at the last count, plus what you bought, minus what you delivered or sold, plus or minus any adjustments. The yard rarely matches it exactly, for reasons like these:

• Moisture. Karton and dyaryo bought wet lose weight as they dry, so the yard shows fewer kilos than you paid for.
• Cleaning and stripping. When workers strip insulation off tanso or remove iron from motors, the clean metal weighs less than what was bought.
• Sorting and regrading. Tansong dilaw recorded as tanso, or mixed plastik later split into types, moves kilos between materials without moving them out of the yard.
• Unrecorded or double-recorded tickets. A purchase paid but never written down shows up as extra stock. A ticket entered twice shows up as missing stock.
• Deliveries recorded at the wrong weight. If you subtract the trading company's accepted weight on some deliveries and your loading weight on others, the book drifts.
• Scale and tara errors at buying time, including eyeballed weights for small sellers.
• Theft and handling losses: pieces walking out the gate, or spilling during sorting and loading.

How often should a junkshop count its stock?

There is no fixed rule for a junkshop, so match the count to the value at risk. A common pattern is a full count of every material once a month or once a quarter, plus short spot counts of expensive materials, such as tanso, tansong dilaw, aluminum and batteries, every week. Spot counts take minutes because those piles are small.

Also count when something changes: a yard worker or cashier leaves, you change your scale, you find a large unexplained gap on a delivery, or your year closes. Periodic asset counts are one of the checks auditors recommend for small offices that cannot fully separate duties among staff; the Ohio Auditor of State lists them alongside reviewing random transactions and reviewing reconciliations.

How do you prepare for a count?

• Choose a quiet time, such as after closing or before opening, and announce it to staff and suki in advance.
• Set a cutoff. Write down the last ticket number and the last delivery before the count. Nothing is bought, sorted or loaded until the count is finished, or new stock waits in a marked area that is not counted.
• Make sure every purchase and delivery up to the cutoff is recorded, so the expected stock is complete.
• Check the scale: level, reading zero, and correct against a known weight.
• Draw a simple map of your yard locations, for example Bodega 1, the metal bins, the open karton area, the back lot and anything still on the truck.
• Prepare one count sheet per location with columns for material, container, gross, tara, net and the counter's initials.
• Work in pairs: one person weighs, one writes. Where possible, the person who looks after an area should not be the only one counting it.

How do you count by material and yard location?

Go location by location, and within each location, material by material. Finish one area completely before moving to the next, and mark each pile, sack or bale as counted with chalk or a tag so nothing is counted twice or skipped.

• Sacks and bins. Weigh each one and subtract the tara of the sack, drum or bin. Write the tara you used, so the numbers can be checked later.
• Bales. Weigh each bale and tag it with its weight and a number. Next time, you only weigh new bales and check that tagged ones are still there.
• Loose piles. Weigh in batches using sacks, a cart or a wheelbarrow with a known tara, and keep a tally of batches. It is slow, but it is the only way to get real kilos for a loose pile.
• Large heavy piles, like bakal. If you cannot weigh the whole pile, weigh what you can, and write any remainder as an estimate in a separate column. Do not mix estimates with weighed kilos.
• Unsorted mixed material. Count it as its own line, not as one of the clean materials. It has its own cost and its own losses.
• Stock on the truck or already loaded for delivery. Count it under its own location, or make sure it is recorded as delivered, never both.

When every location is done, add up the net kilos per material across all locations. That is your counted stock.

How do you compute the variance in kilos and pesos?

• Variance in kilos = counted kilos minus expected kilos. A negative number means stock is missing. A positive number means you have more than your records say.
• Variance in percent = variance in kilos divided by expected kilos, times 100.
• Variance in pesos = variance in kilos times your average cost per kilo for that material.

Average cost here means weighted average: the total pesos you paid for that material divided by the total kilos, across the stock on hand. The international accounting standard for inventories, IAS 2, allows first-in, first-out or weighted average cost for items that are ordinarily interchangeable, which kilos of one grade of scrap are. Ask your bookkeeper which method your books use and stick with it.

Example, with round made-up numbers. Karton: expected 3,000 kg, counted 2,850 kg, variance minus 150 kg or minus 5%; at an average cost of ₱4 per kilo, that is minus ₱600. Tanso: expected 120 kg, counted 112 kg, variance minus 8 kg or minus 6.7%; at an average cost of ₱400 per kilo, that is minus ₱3,200. Bakal: expected 5,000 kg, counted 5,040 kg, variance plus 40 kg; at ₱15 per kilo, plus ₱600.

The example shows why you look at pesos. The karton loss is the biggest in kilos and probably mostly drying. The tanso loss is small in kilos but more than five times the karton loss in pesos, and copper does not dry out. The bakal gain points to an unrecorded purchase or a tara mistake, not good luck.

What are the common causes of a big variance?

Before you decide anyone stole anything, recount the material with the biggest peso variance, with a different pair of people. Then work through the likely causes in order:

• A missed location, a pile counted twice, or stock on the truck counted as both on hand and delivered.
• A ticket after the cutoff entered before it, or a delivery recorded on the wrong day.
• A material recorded under the wrong name, so one material is short and another is over by a similar amount.
• Wrong tara on sacks or bins, which affects every container of that type.
• Natural loss from drying or cleaning, which should be steady from count to count.
• Shortfalls that keep growing on high-value metals, or that line up with certain shifts or people. These are the ones to watch for theft.

What do you do after the count?

• Record the counted kilos as the new stock for each material, with the variance and a short reason, approved by the owner. Losses are a business expense; IAS 2 says losses of inventories are recognised as an expense in the period the loss occurs, and your bookkeeper will treat them that way.
• Keep the signed count sheets with the date and the names of the counters.
• Track the variance per material from count to count. A steady small loss on karton is a cost of doing business. A sudden change anywhere needs an explanation.
• Fix the process that caused the gap: buy wet karton at a lower price, check tara on sacks, tighten the cutoff, or count expensive metals more often.
• If you are registered with the BIR, ask your bookkeeper whether you must file a year-end inventory list. A BIR circular, RMC No. 57-2015, sets its format and a deadline of the 30th day after the close of the taxable year. A real count gives that list real numbers.

ScrapTrack, the junkshop system by Orvyn Solutions, keeps stock in kilos and pesos per material and per yard location as tickets and deliveries are recorded. A physical count in ScrapTrack compares counted kilos with expected kilos and shows the variance in kilos and pesos, with an audit trail of every change. You still have to weigh the piles; the system does the arithmetic and keeps the history. A demo is available.

Sources

• IAS 2 Inventories, IFRS Foundation (ifrs.org). Checked October 7, 2026.
• Segregation of Duties: Key Element to Implementing Internal Controls, training slides, Ohio Auditor of State (ohioauditor.gov). Checked October 7, 2026.
• Tax reminders on your inventories, Let's Talk Tax, Grant Thornton Philippines (grantthornton.com.ph). Checked October 7, 2026.