AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Count once a month on a fixed day after closing, with sales and deliveries stopped at a clear cut-off, using pre-printed count sheets that list every item. Two people count each section, one counting and one writing, and someone else compares the counts with the stock records; any difference above a set tolerance is recounted and investigated before the books are adjusted. Value the counted stock at cost, not selling price.
Before count day
- Fix the date: the last trading day of the month, after closing, or first thing before opening the next day.
- Print count sheets from your item list, grouped by shelf or location. Columns: item code, description, unit (piece, pack, carton), location, count, recount, counter's initials.
- Leave the expected (system) quantity off the sheets. Counters who can see it tend to write it down.
- Tidy the shelves and store the day before: same items together, opened cartons marked, damaged goods moved to one place.
- Tell suppliers not to deliver after the cut-off time, and list any goods already paid for but not delivered.
- Assign pairs to sections, and a supervisor who does not count.
Cut-off: the step most shops get wrong
Cut-off means the count and the books describe the same moment. If goods arrive after the count but their invoice is recorded in the month, purchases rise while stock does not, and profit is understated. The reverse overstates it.
- Delivered before cut-off
- Count it, and make sure the invoice is in this month's purchases.
- Delivered after cut-off
- Do not count it; record the invoice next month.
- Sold but not yet collected by the customer
- Not yours: exclude it and label it.
- Held for a supplier on sale-or-return
- Not yours unless your agreement says otherwise: exclude it.
- Damaged or expired
- Count separately, so it can be written down.
Counting in pairs
- One person counts aloud, the other writes. Swap roles between sections.
- Count in the smallest selling unit unless cartons are sealed and full.
- Write in pen. Cross out errors with a single line and initial them.
- Mark each shelf or bay as counted with a sticker or chalk mark so nothing is counted twice or missed.
- Sign each sheet at the bottom when the section is finished.
- The supervisor recounts a sample, such as every high-value item and one line in ten (an illustrative rule), with a different pair.
Checking the variances
Example only. After the count, the supervisor enters the counts against the stock records.
| Item | Records | Counted | Difference | Cost per unit | Value |
|---|---|---|---|---|---|
| Groundnut oil 3L | 48 | 45 | −3 | ₦9,500 | −₦28,500 |
| Milk powder 400g | 60 | 60 | 0 | ₦6,800 | ₦0 |
| Detergent 900g | 120 | 126 | +6 | ₦2,100 | +₦12,600 |
| Bottled water, pack | 80 | 71 | −9 | ₦2,600 | −₦23,400 |
| Net | −₦39,300 |
Set a tolerance before you start, for example 2% of the count or ₦5,000 by value per line (illustrative). Anything above it is recounted first. If the recount confirms it, look for the cause before adjusting the books:
- Sales not recorded, or rung up under the wrong item (a surplus on detergent and a shortage on something similar often means this).
- A delivery received short but recorded in full.
- Unit errors: a carton recorded as a piece or the reverse.
- Returns and damaged goods not recorded.
- Theft. See stock shrinkage and how to stop it.
Valuing and booking the count
Value the final count at cost. IAS 2 measures inventory at the lower of cost and net realisable value, item by item, so expired or damaged stock is written down to what you can realistically sell it for. Cost can be first-in first-out or weighted average; PwC notes that LIFO is not permitted for Nigerian tax. The closing stock value becomes the closing figure in your cost of goods sold and next month's opening stock.
A manager, not the counters, approves the adjustment. Keep the signed sheets, the variance list and the approval together. Section 31 of the Nigeria Tax Administration Act 2025 requires records to be kept for at least six years after the year of assessment.
Who should count
Mix the teams. The person responsible for a section day to day should not count it alone, because a shortage in that section is the one thing they have a reason to hide. Pair a section's own staff member with someone from another area, or with the owner. In a very small shop with one assistant, the owner counts and the assistant writes, then the owner spot-checks a few lines alone the next morning. If a family member helps, give them the same sheets and rules as anyone else.
Plan the time realistically. A small provisions shop with a few hundred lines usually needs a full evening with two pairs; a pharmacy or hardware shop with thousands of small items needs longer, or a count spread over sections on consecutive nights with careful cut-off for each section.
Making next month easier
- Count a few high-value or high-risk lines weekly between full counts (cycle counting).
- Use barcodes or item codes on every product; see barcode systems for small shops.
- Review reorder levels while the true figures are fresh; see reorder level and safety stock.
- Keep the same day and time each month so figures compare cleanly.
- For tax valuation questions, read inventory valuation for tax.
Questions people ask
How often should a small shop do stock taking?
A full count at least monthly, with a quick weekly count of high-value or fast-moving lines in between.
What is cut-off in stock taking?
The point in time the count describes. Goods delivered before it are counted and their invoices recorded in the month; goods arriving after it are left for next month.
Should stock be valued at cost or selling price?
At cost, or lower if the stock is damaged or expired and will sell for less. Valuing at selling price overstates profit.
Why do two people count stock?
One counts and one records, which reduces errors and makes it harder for anyone to hide a shortage. A third person checks the results against the records.
Sources
- IFRS Foundation: IAS 2 Inventories (2024 issued standards) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, corporate income determination (last reviewed 29 May 2026) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (s.31, s.57, s.102) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.