Inventory reconciliation

Inventory reconciliation is the process of matching inventory records with the physical inventory stock held in your store or warehouse. The method of inventory reconciliation starts by counting stock to match physical inventory available purchasable with recorded stock.

The process of inventory reconciliation also involves the counting of damaged or outdated products and helps to spot the source of inventory discrepancies in order that they are often addressed. The method helps to enhance inventory tracking procedures and stop theft.

When inventory discrepancies are found, inventory records are updated, or reconciled, to match the particular number of things available. this needs creating a stock reconciliation statement that accurately represents your current inventory and means stock items got to be added to or faraway from the database.

The inventory reconciliation process

To maintain effective internal control, businesses got to periodically compare recorded inventory stock against the particular physical stock within the warehouse or retail outlet. If there's a difference between the number of things your records state and therefore the actual stock, you would like to seek out the source of the error and reconcile that difference.

The basic steps of a stocktake and inventory reconciliation process are:

Count your products and compare inventory records with a particular physical inventory. Count items again and double-check that stock numbers on the inventory record haven't been misread. confirm products are within the correct location and haven't been misplaced

Check and recheck that you simply are using the proper information which serial and stock numbers match the things being counted. make sure records are up-to-date which all sales are entered into the system and every one invoice are accounted for

Compare the results to spot and address any inventory discrepancies. These can occur thanks to inventory waste through spoilage, damage or obsolescence but also can result from theft or supplier fraud

Reconcile inventory records, adjusting figures in order that they match physical count. albeit no explanation for the discrepancy is found, it's important to possess an accurate record of your inventory stock, so it's accurately reflected in financial reports

Compare results with previous inventory reconciliations to work out if discrepancies are decreasing over time or to spot patterns so you see if your internal control practices are working

Inventory Management

Inventory reconciliations help businesses to work out the problems that are causing shrinkage and allows them to implement processes to stop them. Optimise internal control, to scale back the danger of inventory discrepancies by taking the subsequent steps:

• Organise your store and ensure stock items are easily located and in their proper place, clearly labelling boxes and shelves to avoid confusion

• Minimise the danger of human error by introducing the proper technology. Barcode scanners and RFID devices improve internal control and help reduce the danger of counting errors when undertaking a listing reconciliation

• Implementing a POS system that tracks sales and integrates with online inventory management software to automatically update inventory levels in real-time, whenever a purchase is formed

• Streamline inventory reconciliation through cycle counting to streamline the method of reconciling inventory. Grouping products into categories reconciling one category at a time and systematically counting through every single product on an endless basis

• Invest in digital tools to assist in optimise internal control. With online inventory management software, you'll enter detailed information about your inventory into the system and sync the software to your POS system

Getting the proper online inventory management solution to affect the intricacies of inventory reconciliation will prevent time automatically adjusting inventory records as sales are made.

Automation helps avoid mistakes, specifically in comparison to manual internal control.

However, even with digital tools, inventory reconciliation should still be undertaken on a daily basis, as occasional discrepancy can occur and everyone other processes running well, may indicate shoplifting or theft.

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