What procedures does an inventory verification service provider follow to maintain inventory accuracy in a company?

A company must have a good performance system. In winning the hearts of your potential target market, you don’t just need a quality product. But it is also important to have good quality performance. This can only be done by opting for?inventory verification services?and inventory management.

With?inventory verification services, the company can manage accurately how much inventory is needed and when will it be required to produce/order more goods.

Conducting an inventory verification is an important job for a company in managing its inventory. In a company engaged in trading. Inventories in question can be in the form of raw materials obtained through purchases from suppliers, production processes, and finished goods that have become products and are ready to be sold and shipped.

So in carrying out inventory verification, a company can understand the flow of inventory to ensure its business continues to run smoothly.

So more easily, inventory verification is the activity of a company checking and recording the inventory owned by the company using a predetermined analytical procedure.?

What are the Inventory verification Procedures performed by the Company?

Let’s take an example of an inventory verification performed for a trading company.

1. Inventory evaluation

It involves a check of the inventory of goods stored in the company’s warehouse and generally, a company conducts this activity at the end of the year or sometime before and after the end of the year.

After this, the calculation results are re-analysed by performing several stages of the inspection procedure. Some of these inspection procedures are:

• Checking the accuracy of data compiled in the records.
• Analysing and matching every inventory item with the inventory report.
• Checking and tallying the total value with the company’s inventory ledger.

1. Locating waste or damaged items present in inventory

During the inventory verification, it is also checked whether there are damaged, lost, or used items that are being counted as fresh and faultless inventory.

1. Preparing the reports

The next step includes concluding the results of the inventory verification performed and suggestions are made regarding adjustments if necessary.?

1. Ensuring Financial Statements are under Accounting Principles

The last activity that needs to be done is to check and ensure that the presentation of inventory in the financial statements is under accounting principles applied.?

Tips for a Good Inventory Management

• Segregate duties and responsibilities in purchasing, warehouse, goods receipt, accounting, and finance. The division of three makes the performance more systematic.
• Make use of barcode numbering and RFID tagging.
• Implement an authority system on the purchase, sale, receipt of cash or bank, or on the disbursement of cash or bank.?

Have inventory verification service providers on your side

In maximizing the smooth running of a business, many supporting aspects must be done well. You can grow your business potential with?inventory verification services.

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.

Posted by:

CA Aman Aggarwal

AKGVG & Associates