Glossary
What is dead stock?
What dead stock is, why it quietly costs a small business money, and how to find it in your own records.
Updated
In short
Dead stock is goods that have not sold for a long time and probably will not sell at full price. SimpleERP has no dead-stock flag; find it from the movement ledger filtered to sales and the stock list.
Dead stock is goods that have not sold for a long period, often six months or more, and are unlikely to sell at full price. It ties up cash and godown space, and it may be overvalued in the books. Typical causes are a discontinued design, an over-sized order or a product that never caught on. Finding it early leaves room to discount, return or rework it.
Dead stock: a worked example
Lakshmi Steel checks on 10 October 2026, using the sales movements since April and the stock list.
| Product | On hand | Value | Last sale | Days since |
|---|---|---|---|---|
| LED panel 2×2 | 200 | ₹2,29,120 | 9 Oct 2026 | 1 |
| Steel rack 4 shelf | 70 | ₹2,21,900 | 8 Oct 2026 | 2 |
| Cable tray 3 m | 150 | ₹1,53,000 | 2 Oct 2026 | 8 |
| Steel rack 6 shelf, old design | 9 | ₹35,100 | 12 Mar 2026 | 212 |
FAQ
Questions, answered
How long before stock counts as dead?
There is no fixed rule. Many traders use six months without a sale; for fast items such as LED panels, three months may be enough. Pick a period that fits your trade and check against it every quarter.
What is the difference between dead stock and slow-moving stock?
Slow-moving stock still sells, just rarely, such as two racks a quarter. Dead stock has stopped selling altogether. Slow movers need lower reorder levels; dead stock needs a decision to discount, return, rework or write off.
How do I write off dead stock?
If the goods are damaged or worthless, post a stock adjustment with a reason such as damaged; it removes the quantity at average cost and charges the value to stock adjustment in the books. Keep a note of why, for your auditor.
Can I sell dead stock below cost?
Yes. Invoice it at the clearance price. Cost of goods sold is still taken at the average cost, so the invoice shows a loss on that line, which is the honest picture. GST is charged on the price you actually sell at.
Related
Keep reading
Stock ageing
Grouping stock on hand by how long it has been held, in buckets such as 0 to 30, 31 to 90 and over 180 days.
Read moreStock adjustment
A document that corrects recorded stock to the shelf after a count, damage or loss, with a reason and a ledger entry.
Read moreInventory
Stock on hand by warehouse at weighted average cost, with a movement ledger and a low-stock list.
Read more
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