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Despite the common belief that inventory is primarily needed by accountants, conducting an inventory is of primary interest to the management and owners. For some reason, it is thought that an inventory is only necessary when a company has a large amount of stock. But what exactly is it really needed for, and how is it useful? A well-conducted inventory ensures that the managers of all company units have confidence that the financial statements and the information contained in the system about assets and inventories are accurate and fair. Additionally, an inventory helps mitigate the risk of fraud. And of course, theft is usually uncovered during an inventory.
What needs to be inventoried?
1. Stock
2. Fixed assets (including ongoing construction)
3. Cash (both in bank accounts and cash on hand)
4. Small tools
5. Receivables
6. Liabilities
What mistakes can occur during the inventory process that hinder the detection of losses?
1. Choosing an incompatible inventory date
2. Movement of stock between warehouses during inventory
3. Manual counting vs. scanning (recording incorrect quantities vs. incorrect barcode)
4. Pre-filled reading sheets
5. Failure to identify shortages or surpluses
6. External company warehouses not accounted for
7. Goods belonging to another owner being mistakenly included — must be separated!
8. Filling out reading sheets — must be done with a pen; corrections with erasure or scanner should be made as amendments
9. Recognizing the goods being counted
10. Double counting of inventories
11. Weighing, measuring, and counting stock must be reliable
12. For open packages, a trustworthy count must be ensured
13. Stock must be properly stored, monitored, and preserved
14. Goods with decreased sales value should be marked for later discounting or write-off
15. The work of inventory takers must be supervised and guided
16. A confirmation letter should be issued in the form of a positive confirmation request, where the confirming party agrees or disagrees with the information in the request and provides additional information if necessary
17. Remember also to conduct inventories during holidays
