Thursday, 30 June 2016

Inventory control: A guide for all

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Hello readers, I am assuming you all prepare financial statements for your businesses. After that being said, in order for you to control your inventories (stocks). The purchases and sales let you know the inventories bought and the ones sold. The inventories on your statement of financial position will let you know the value of inventories you do have. However, you have to compare what you have on your statement with what you have that physically exist. 

In order to be able to ascertain if the inventories you have written on the financial statement correlates with what that physically exist you have to carry out a physical inventory count. You might not be able to carry out your inventory counts yourself it depends on the volume. Inventories should be prioritized based on its value, as such the expensive inventories must be identified first and be given the most attention.

Inventories should be tided up and marked while counting them so as not to lose tracks. All damaged and obsolete goods must be discarded. Once it has been counted by one individual it should be counted again by another individual to ensure accuracy. After the inventories have been counted, they should be compared with what you have on the financial statement. If there are discrepancies it should be investigated. If the inventories are not found and cannot be accounted for then they should be adjusted for on your system so that it can reflect on your financial statements.

Counting your inventories every 3 months will ensure accuracy and minimize the risks of your goods being stolen.

Keep checking my blog regularly, Cheers!



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