Methods And Principles For Effective Stock Taking

Most warehouses have stocktaking at every month-end and year-end.

The frequency of stocktaking can also be determined by what happens in the organization. Emergencies such as where a lot of stock has been taken can prompt stocktaking.

The requirements for a monthly surprise check usually follow the end of the yearly accounting period. In some organizations, it may be waived provided that the period between the surprise checks before and after the end of the accounting period does not exceed 60 days. Where deemed necessary, the management may direct that stocktaking be conducted more frequently.

The General Requirements For Stocktaking

Warehouse management must ensure:

• That the warehouse manager has prepared for a scheduled stocktaking by taking all the necessary steps to ensure stock is arranged neatly and in such a way to facilitate accurate counting.
• That all relevant documents have been auctioned and submitted to the relevant stocktaking team.
• That the stocktaking is complete.
• What resources are made available?
• That all participants have been informed.
• Ensure that accounting records have been updated, cut-off procedures have been followed and that both personnel and equipment are available to complete the extension of values.
• Act as, or appoint, a stocktaking monitor where required.

The manager of the stocktaking team must control all supervised stocktaking to ensure that all members have been properly briefed on their duties and responsibilities.

While the accuracy of the physical count is important, the need to verify that all outstanding documentation has been accounted for and recorded in the appropriate accounting period cannot be overemphasized.

All change funds, petty cash funds and other funds that could affect the inventory accountability must be verified but are not to be included as part of the inventory. Copies of the verifications are to be attached to the stocktaking report.