Importance of stock audit in an organisation

Stock audit or inventory audit is an accounting procedure which is performed to compute a company's absolute load of physical products/crude materials. This procedure is particularly significant underway and retail organizations which are working in various areas. The stock review assists with monitoring the measure of physical resources remaining and specially make vital courses of action new stock. In the event that the organization is managing different sellers and providers, a stock audit will make the stock administration process simpler.

As more organizations are entering the worldwide market, the entrepreneurs and partners need to discover creative answers for support the business. So as to limit the tasks cost and improve business execution; associations should lead ideal stock audits. The stock degree of an organization directly affects the organization's benefit. A mistake in stock report can prompt extra costs for the association.

In spite of the fact that the stock audit of essential physical inventories is for the most part directed at or close to the furthest limit of the year, it is smarter to complete the audit in determined time stretches to guarantee congruity of business activities. The accessibility of crude materials is a basic viewpoint to consider in assembling companies.Stock audit is likewise valuable to keep a record of the amount and nature of crude materials.

Why stock audit?

1. Records accurate degree of stock and help to stay away from lack or overloading of materials.
2. Assists with discovering inventory losses caused because of wastage, harm or theft.
3. Uncovers obsolete raw materials and off base requests provided to clients
4. Compare the actual quantity of stock against that noted on the accounting records
5. Avoid unnecessary investment on raw materials and can help to save money
6. Enable the business owners to understand the true financial status of the company
7. Helps to find out discrepancies in the packaging and warehouse procedures

A stock audit can be done at the warehouse, a distributor area or at a retail outlet. The intricacy of a stock audit increments with the quantity of audit areas. A stock audit includes evaluating the stock records &transactions and coordinating physical stocks with the stock records.

On a general basis, the following factors are reported during a stock audit:

1. SKU(stock keeping unit) – Every SKU is assigned a unique identification number which is usually same as the EAN or UPC
2. Product details – For e.g. IMEI No., Serial No.;
3. Valuation of the stock
4. Deviation of stock from the records

Cycle counts

Cycle count alludes to the way toward including stock things accessible in a specific physical area. Contingent on the idea of stock, number of exchanges and the estimation of things, cycle check can be conveyed Daily, Quarterly/Half Yearly or Yearly. The year's end cycle consider is alluded to Wall to Wall Cycle Count. This is an mandatory audit which ought to be directed during the finish of each money related year.

Various asset management softwares are available for managing & recording the inventory levels. These programs can be used to conduct effective stock audit procedures.