Material Management- Stocks to be verified in the stores is important duty of the store manager. Some methods help them to keep a check & avoid any discrepancies.

1. Presented by :
RN Ankita Ashok Kadam
PGDHA II (2019-2020)
Roll no. 04
Garware Institute of Career Education & Development
STOCK VERIFICATION
Material Management

2. Store verification is a process
of physically counting &
checking inventory in the unit,
against its book balance at
least once in a year
DEFINITION

3. • Reconcile the physical & book balances are of prime
importance.
• Identify the weaknesses in the operations.
• To ensure the input, output & stock on hand accounted for
accuracy.
• Ensure proper placement of materials.
• It also helps to identify slow, non-moving & reduce obsolete
items.
• The chances of collusion amongst the various staff members.
• In order to avoid discrepancy in stocks.
• Constant review of orders.
OBJECTIVES

4. • better management &
control over various
activities of production.
• goods in process &
finished goods.
• basis of inventory control
by value.
• Accounting of all materials
received.
• Tally of accounts- physical
v/s accounting
• Determining ordering
quality
• Stock taking- physical
inventory/ stock
verification
Value of Stocks Items of Stock
STORES& ACCOUNTING

5. Physical verification is necessary since
they are the assets of the organization
• Correctness of stocks & values of stocks.
• Detection of frauds, thefts, loss & damage
– deviation from procedure etc.
• Examines the process of storage for any
weaknesses.
• Moral check on the staff.
PURPOSES

6. 1. Spot Verification
2. Routine Verification
3. Annual or Periodical Verification
4. Perpetual/ Continuous Stock Verification
5. Low Point or Out-of-Stock Verification
KIND OF PHYSICALVERIFICATIONS OF
STOCKS

7. • While issuing or receiving
• Voluntary, simple, good,
regular
• No official recognition
• Serves as self check
mechanism for internal
procedures of stores
• Always in addition to other
methods
SPOT VERIFICATION

8. • By store staff for own
satisfaction
• No official recognition
• Mechanism for internal
control
Objectives
• Check store records
• Accuracy of store records &
quantity of stocks
• Detecting theft, wastage etc in
time
• Moral check on staff
• Prepare staff for inspection &
internal audit
ROUTINE VERIFICATION

9. • Whole stock is physically verified
at the end of the given period,
usually annually at the time of the
ending of the financial year.
• Total official recognition & the a
counting is tallied.
• Small stores can be done in one
day.
• Large stores can be done in few
days.
ANNUAL/ PERIODIC
VERIFICATION

10. • Simple, convenient &
satisfactory.
• Value of closing stock is
taken into account
• No extra shelf is required
in small stores.
• Authentic verification of
stores.
• Extra staff required for extra
large stores.
• If staff is disinterested or
inexperienced the results are
not satisfactory.
• Discrepancy detected only
once in a given period. Proper
investigation not possible.
• Delay in preparing of final
accounts due to formalities.
Merits Demerits
ANNUAL/ PERIODIC VERIFICATION

11. • An advanced chalked out program is set.
• No deviation is allowed.
• All items physically checked at least once
a year & certain items checked daily.
• Few well trained verifiers, directly under
the control of the materials control
department or account department.
• Detailed stock records are maintained.
• Stores may not be closed for the store
checking.
PERPETUAL/ CONTINUOUS STOCK
VERIFICATION

12. • When particular stock items are on a low point & needs
replenishment.
• When the particular item is out of stock.
Method :
• Done by store staff.
• Records are kept by storekeeper & are used in annual
accounting.
• Records sent to accounts & purchase department.
• Requires greater c-ordination between stores & accounts.
LOW POINT / OUT-OF-STOCK
VERIFICATION

13. • Appointment of a team of verifiers(internal & external)
• Provision of stocktaking sheets which are numbered & dated when
used
• Verification of sheets with stock types
• Physical verification of stock
• Noting of discrepancies, expired goods, damage goods etc.
• Investigating into the discrepancies & reporting to the designated
authority.
• Preparation of internal discrepancies resolution report as well as
stock written report after approval of higher authorities.
• Preparation of stock valuation sheet/ inventory valuation sheet
incorporating details of all the stocks taking sheets.
PROCEDURESFOR STOCK
VERIFICATION

14. • Difference in quantity,
complimentary items.
• No record of an item
purchase which physically
exists.
• No stocks but records
present.
• Batch number discrepancy
TYPES OF DISCREPANCIES

15. • Stock is less due to theft
• Pilferage
• Natural loss
• Loss stock due to changing in temperature
• Errors in counting
• Loss due to careless handling & careless
measurement
• Any other losses may be the nature of
avoidable or unavoidable.
RESULTS OF STOCK
VERIFICATION