Slow-Moving and Dead Stock Calculator
Find out how many months of cover an item has, whether it counts as slow-moving or dead stock, how much cash it ties up and what provision to book. Paste a list to classify every SKU at once. Free, no signup, nothing leaves your browser.
Short answer
Months of cover = quantity on hand ÷ average monthly usage. Up to 3 months is healthy, 3 to 6 is worth watching, 6 to 12 is slow-moving, over 12 (or no movement in a year) is dead stock. A common provision policy is 25% at 6 to 12 months, 50% at 12 to 24 months and 100% beyond that.
Example: 480 units at S$12.50 selling 35 a month is 13.7 months of cover, S$6,000 on the shelf and a suggested S$3,000 provision.
Checked 28 October 2026. Figures in S$; change the currency box for any other.
How much of your stock value is sitting in the slow and dead bands?
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How to identify slow-moving inventory
Divide what you hold by what you use or sell in an average month. The answer is months of cover, and it is the single most useful stock number a small business can run every month. An item with 13 months of cover is not a stock-out risk; it is cash parked on a shelf, and it will be older and less sellable by the time it moves.
Thresholds depend on the trade. Fresh food measures cover in days; spare parts for machines you still service can justify a year. The defaults here (3, 6, 12 and 24 months) suit most trading, distribution and light manufacturing businesses. Change the provision percentages to match your accounting policy.
Worked example: 480 units on hand at S$12.50 each, selling 35 a month. Cover is 480 ÷ 35 = 13.7 months, so it is very slow. The stock is worth S$6,000, and at a 50% provision for the 12 to 24 month band you would book S$3,000. Across a list of 400 SKUs it is normal to find 15% to 25% of the stock value in the slow and dead bands.
What to do with dead stock
- Stop buying it. Set the reorder point to zero before anything else; many dead items are still being reordered because the minimum was set years ago.
- Sell it at cost or bundle it with a fast mover. Recovering S$0.60 on the dollar this month beats S$0.00 next year.
- Return it if the supplier takes it back, even with a restocking fee.
- Write it off and clear the space. Space, counting time and insurance are costs too.
Slow-moving inventory provision
Accounting standards require stock to be carried at the lower of cost and net realisable value, so a slow-moving provision is a judgement about what the stock will actually sell for. Age bands are a practical way to apply that judgement consistently: the same percentage for every item in a band, reviewed at year-end against what actually sold. Keep the policy written down; auditors and buyers of the business both ask for it.
Why spreadsheets get this wrong
Months of cover needs two numbers per item that live in different places: the quantity on hand (warehouse) and the sales or usage history (accounting or POS). When they are joined once a year for the audit, the slow stock has already aged another year. In a system where sales reduce stock as they happen, this report is a filter, not a project. The free stock take variance calculator checks whether the quantities you are relying on are right in the first place.
Questions
What counts as slow-moving inventory? A common rule is anything with more than 6 months of cover (quantity on hand divided by monthly usage), with over 12 months or no movement in a year treated as dead stock. Adjust the thresholds for your trade.
How do you calculate months of inventory on hand? Divide the quantity on hand by the average quantity used or sold per month over the last 6 to 12 months. 480 units selling 35 a month is 13.7 months of cover.
How much provision should I make for slow-moving stock? There is no fixed rule; a common policy is 25% for 6 to 12 months of cover, 50% for 12 to 24 months and 100% beyond, reviewed against actual net realisable value at year-end.
Is dead stock a cash problem or a profit problem? Both. The cash was spent when the stock was bought; the profit hit comes when you provide for it or write it off. Clearing it recovers some cash and stops the provision growing.
