Verify to quantify: Simple, accurate inventory management

Inventory management is a prominent part of any business that vends with physical goods. It involves the process of tracking, ordering, storing, and selling inventory items to ensure optimal levels of stock, reduced costs, and efficient operations. However, maintaining an accurate inventory count can be daunting, especially for businesses with a high volume of sales or multiple locations. That’s where inventory verification comes in as an essential tool for keeping track of inventory levels and minimizing costly errors.

The core purpose of inventory verification is to ensure that the actual stock levels match the recorded inventory levels in a company’s books. It involves conducting periodic checks to verify the physical count of inventory against the registered count. The verification process is an effective way to detect discrepancies in inventory levels and identify the root cause of any discrepancies. By reconciling inventory levels, businesses can improve their?inventory management, minimize the risk of stockouts, and reduce the risk of excess stock.

There are two main inventory verification types: Periodic and perpetual verification

• Periodic verification involves conducting regular physical counts of inventory items at predetermined intervals. This approach is suitable for businesses with a low sales volume and can conduct inventory counts monthly, quarterly, or annually. Periodic verification helps companies identify inventory level discrepancies and take corrective action to address any issues.
• Perpetual verification, on the other hand, involves real-time tracking of inventory levels using technology such as barcoding and radio frequency identification (RFID). Perpetual verification is suitable for businesses with a high sales volume and needs to maintain accurate inventory levels constantly. This approach is more precise than periodic verification and allows companies to track inventory levels in real time, reducing the risk of stockouts and overstocking.
• In addition to periodic and perpetual verification, surprise verification is another approach that some businesses use to ensure the accuracy of their inventory levels. Surprise verification involves conducting unexpected inventory counts to detect discrepancies or fraudulent activities. This approach suits companies that have experienced inventory discrepancies or want to deter employees from engaging in unethical behavior.

Conclusion

Inventory verification is crucial for maintaining proper inventory levels, reducing costs, and optimizing operations. Whether a business uses periodic, perpetual, or surprise verification, the key is to ensure that the physical inventory count matches the recorded count. By doing so, companies can improve their inventory management, reduce the risk of stockouts or overstocking, and ultimately boost their bottom line. So, verify to quantify – it’s the simplest way to achieve accurate inventory management.

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise.?AKGVG & Associates?does not intend to advertise its services through this.