An inventory verification process is one that aims at examining and validating the existence and location of various stocks in a main inventory control system. Most companies believe their inventories to be their assets, and claim valuation. Auditors then use multiple procedures to test if the valuation has been carried out rightfully or not.
Audit has various benefits, as it helps determine the progress of the company, and avoids trouble like overstock and shortfalls. To ensure accuracy, you need to have certain systems in place! Here is how you go about it:
- Take stock of the locations: First and foremost, understand the various locations. This will ensure accurate accounting. Look for warehouses, overstock locations, or any other storage areas that might be available. Only once you have seen the entire stock, should you start the physical inventory count.
- An Inventory Audit Checklist: for Inventory verification, it is essential to understand the items that should be in the inventory. If you don’t cover all the items, it might not match the company’s inventory and can lead to budget mismanagement, which will lead to overall customer dissatisfaction.
- Inventory Management System: An inventory management system helps you track the quantity, cost and location of every single product. It makes auditing very easy, as it is a blend between the inventory control software, smart devices and barcode scanners.
Periodic physical review of inventory helps identify variances between physical and book quantities and assists in evaluating internal control on movement, accounting and safeguarding of inventory. In transactions – it is difficult to remember every product, so it’s best to have a practical inventory verification procedure in place, so as to evaluate your assets, know your stock, track the inventory efficiently.
Do you need help with your inventory verification? Get in touch with PKF UAE – they provide inventory audit services in Dubai, and assist their clients with the complete inventory verification process. Inventory verification includes, amongst other things, appropriate marking of physically verified stocks, identification of damaged and slow moving or obsolete items, deriving variances from book quantities and identifying the absence of adequate supporting documentation.
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