How digital checklists help you to perform an inventory audit
What is an Inventory Audit? Adopting inventory audit software or an inventory management system can save you from operational chaos. A direct solution to this problem is inventory audit software, which is specifically designed for managing these audits and streamlines the entire process while saving you time, effort and unnecessary stress. This process may be conducted internally or at the request of an external auditor. Here are some questions to consider as you prepare to assess your inventory: Is my inventory of raw materials, finished goods or other assets too much to count by hand?
Is my inventory stored at my company or a third-party logistics building? Is this the best time for me to conduct my inventory audit? Here are some common proceedings. Cutoff Analysis A cutoff analysis is when you cut off all receiving and shipping operations to ensure nothing is mistakenly handled or goes unaccounted for when you do the physical inventory count.
Physical Inventory Count To save you the suspense, this is where you physically count your inventory so you know what you have onsite. Freight Cost Analysis If your business ships products to different locations, this procedure will aid in determining shipping costs.
It records when your items were sent and when they arrived at their proper destinations. This also serves as an excellent way to document items that are lost or damaged en route. Overhead costs include utilities like rent and electricity.
Analyzing these costs helps you predict the indirect costs of doing business, which can assist you with budgeting for the upcoming year. Again, this procedure is optional and only useful if you count these costs as part of your inventory calculations. High-value, rare items are categorized as A items. Medium or mid-value items are sorted as B items. C items are low-value items. ABC analysis can be an effective method to manage stockrooms.
Group C items should be placed by the entrance to quickly speed up trips to the sales floor. Group A items should be properly placed and secured in a safe place to minimize theft and costly losses. It happens. A recount is the first thing you should do for this investigation. When recounting the inventory, have a different person crunch the numbers, because the first person could miscount again. Search for a potential second location and count again.
One of your products may be measured as an individual unit, but it could be marked in your ledger as pounds, boxes, inches, etc. Missing Paperwork One of the most common incidents to result in a reconciling items investigation is missing paperwork. Other examples of missing paperwork include issuances from your warehouse to a production area or receipts not entered into your system. The item may have been purchased by one of your customers. This more likely happens when a business renovates its building or upgrades its products.
Inventory Audit Software vs Inventory Management System In the days before electronic and smart devices, businesses had to audit their inventory with pencil and paper. Though tedious and time-consuming, it was the only way to keep track of how many products and goods were available on the premises. Now the standard method of conducting an inventory count for big and small businesses is to choose a selection of items, physically count them and compare your data with the records in your software.
Businesses that adopt these technological advances will gain a clearer understanding of their stock so they can integrate efficient ways to reach a new pinnacle of customer satisfaction. Other perks include accurate data tracking, shrinkage in theft and faster assessments so you can return to regular hours of operations. Compare Top Inventory Management Software Leaders An inventory management system, on the other hand, not only helps facilitate audits, but also creates a storage system that keeps your goods organized and optimized for distribution.
Example of how a user can track product data within an inventory management system. The ideal software should possess the following benefits and features: Reduce Preparation Time Scheduled audits at the request of a third-party auditor require you to gather all of your paperwork.
This software lets you prepare accurate reports in minutes. As a result, you save time for yourself and the auditor. Make Verified Data Accessible Work orders have common qualities i.
With this software, these common qualities are stored and made available to auditors with just a few keystrokes, thus relieving unnecessary headaches. Facilitate Scanning and Tracking of Assets A built-in barcode scanning tool is a top priority.
Scanning each item automatically records and stores data into the software. Generate Reports Generating on-demand and scheduled reports during your audit is a must. You now have the right know-how and tools to prepare for your audit and take note of your inventory.
Using the ideal inventory audit or inventory management software for your business increases your efficiency, alleviates stress and helps you successfully meet compliance requirements to ensure smooth sailing for your business or company. How has software helped you with your inventory audits? Let us know in the comments. Khaleel HayesWhat is an Inventory Audit? Benefits, Procedures and Software Solutions
How to Audit Warehouse Inventory (with Checklist)
There are different types of inventories that can be conducted: raw materials, work-in-process and finished goods The first one deals with the manufacturing process: raw materials that are used to create a finished product. The second one includes materials that are waiting to be transformed into a finished product while the last ones are the final products you get after converting the raw material.
Running a warehouse inventory is not easy. Performing an inventory using paper checklists could be a waste of time as data need to be filled in manually.
If you lose the papers, all the information is gone and retrieving it can be challenging. Digital checklists can ease the process and will help you to improve efficiency and productivity in many ways. Benefits of using a digital inventory audit checklist Having a checklist of all the items is the first step to execute an inventory. A digital inventory audit checklist will help you to keep all your data regularly updated and presented systematically.
Here we have listed 6 advantages of using digital warehouse inventories: Keep your data organised Digital inventory audit checklists will help you to organize your items and product information. Successful inventory management is a direct result of efficient data analysis.
If your product data is accurate, you will avoid errors and executing the inventory will be easier. It will save you time They help you save time because you can do quicker reporting and real-time follow-ups of the issue.
A digital inventory audit checklists allow you to have pre-listed taska in your checklists so you can directly fill them up as you go along with your inventory, while sending notifications to other team members if required.
Also, the same checklist can be reused for different task so there is no need to elaborate new ones. You save money and trees by reducing your paper consumption By saving a ton of paper, you can save 17 trees, liters of water, kilowatt of power supply and liters of fuel. According to paper industry statistics , a typical office worker produces kilograms of paper waste. You can add pictures of items to your checklist By adding an image of the item on your records you can easily identify if the item has the correct tag which ease the identification of any particular product.
You will be able to send reports in one click Digital checklists speed up the processes, get the insights earlier and share reports straight away so the rest of the team can proceed with their tasks sooner. You can save the findings for future inventories All the findings can be organized into the inventory system so that the results can be referenced for future inventories an analysis.
Do you need to check what is remaining in your stock? Then, learn everything about our digital checklist to arrange your inventory process in the best way possible. With DataScope you can build your own digital checklists and inventory checking. Sign up for free now!
The Perfect Warehouse Audit Checklist to Protect Your Bottom Line
Often asked: What do you check in a stock audit?
To update the actual physical stock as book stock. To ensure proper preservation and handling of stocks. We offer reliable stock audit services to companies and organizations with a dedication and aim to help them safeguard and monitor their physical assets and inventories. Here are a few listed key benefits of stock audit : Direct impact on costs and bottom line Prevent pilferage and fraud Identifies slow moving stock, obsolete stock, dead stock and scrap Third party independent opinion, especially for agent warehouses Identifies gap in current inventory management process Enable accurate valuation of inventory List Of Documents Required For Stock Audit: 1.
Stock Statement as on date of verification 2.
Provisional balance Sheet, Trial balance as on date of verification. Latest audited financials. Stock Insurance policy if any 5. Invoices of Purchases, Sales 6. Stock Register 7. Method of valuation of closing stock 8. Also, if required you can obtain a copy of the same for your records.
Things to check when you are on a Stock Audit – Check List
Make sure you safely preserve all your working papers even after the completion of the report. You should have a basic knowledge of the type of activity undertaken by the client. If you are unaware about the same, you can get the details from the branch office of the bank. It may sometimes not be possible to count the stock completely. At that time, you should be careful enough to take proper approximations.
Easier and Quicker Inventory Audit Checklist
You should also read about the collateral security offered by the client. If they have any Bank Guarantees or Letter of Creditsmake sure you have proper information about the same. Valuation Report by the Authorised Valuer should also be reviewed by you. Most of the banks have the policy to obtain stock statements periodically. Make sure the same have been supplied by the client. You can carry a copy of the same to the client place so that you can estimate their average stock.