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- 1. Inventory Auditing Presented By Luis Alberto Cabrera Ortega Sona Krishna Laya Kochuparambil Peter Jade Ley Bon
- 2. Introduction An inventory audit is a physical count of goods in possession or transit. It's used by the company for internal audit purposes to gain better visibility into their current physical inventory and to ensure the inventory records are accurate.
- 3. Contents ABC Analysis Calculation of Total Inventory Percentage Advantages of Cycle Count Disadvantages of Cycle Count Advantages of Periodic Count Disadvantages of Periodic Count Recommended counting method Conclusion
- 4. ABC Analysis
- 5. ABC Analysis
- 6. ABC Analysis
- 7. Advantages of Cycle Count Better order fulfillment rates Accurate, up-to-date data for effective business management: Faster identification of problems in shipping, receiving, and inventory transfer Less disruption. Enhanced capability to cut down on both theft and errors
- 8. Disadvantages of Cycle Count Time-consuming Labour intensive Objectives not being accomplished.
- 9. Advantages of Periodic Count Easy to Implement. Low-cost. Suitable for Low Inventory Businesses Physical Inventory Count
- 10. Disadvantages of Periodic Count Time-Consuming Unreliable Estimation Inadequate automation Additional Human Resources Unsuitable for businesses with large inventories
- 11. Recommended Counting Method Why? For an effective inventory audit, we recommend using the cycle counting method. Companies use cycle counting to verify their inventory counts. Regular counts and product adjustments are used in this method. All their goods have been counted. Supply chain and warehouse managers plan inventory audits. Inventory management plans with low transaction error rates and high stock record accuracy don't interfere with staff's essential tasks.
- 12. Conclusion There is an specific inventory auding method that will suit your needs depending on the nature of your business and B. Strategy. But, overall, inventory auditing is an important process for any business that wants to maintain accurate inventory records, prevent loss, comply with regulations, and save costs. And therefore it should never be avoid. any warehouse wishing to keep accurate and efficient inventory records must develop a standard operating procedure for cycle counting. Warehouse managers can enhance inventory management and lessen the risk of inventory errors by following the above- described approach, which will also improve the warehouse's overall operations.
Editor's Notes
- Accuracy: One of the primary reasons for inventory auditing is to ensure that the inventory records are accurate. This means verifying that the physical inventory matches the inventory recorded in the system. Accurate inventory records are important for managing stock levels, planning for future purchases, and avoiding overstocking or understocking. Loss Prevention: Auditing inventory helps to prevent loss and theft. By checking the accuracy of the inventory records and comparing them to the physical inventory, any discrepancies can be identified and addressed. This helps to prevent loss due to theft, damage, or mismanagement. Compliance: Inventory audits are often required to comply with regulatory requirements. Auditing helps ensure that inventory is properly accounted for and that any discrepancies are addressed in a timely manner. Cost Savings: By identifying discrepancies in inventory, audits can help reduce costs associated with overstocking or understocking. By having accurate inventory records, companies can better plan for future purchases and avoid unnecessary expenses. In conclusion, creating a SOP for cycle counting is an essential step in keeping accurate and trustworthy inventory records in a warehouse. As opposed to performing a full physical count, using a sampling method to count a fraction of the inventory might be a more effective and economical way to confirm inventory levels. Cycle counting also gives warehouse managers the ability to spot potential anomalies and mistakes in inventory records, enabling them to fix problems before they become serious ones. All things considered, any warehouse wishing to keep accurate and efficient inventory records must develop a standard operating procedure for cycle counting. Warehouse managers can enhance inventory management and lessen the risk of inventory errors by following the above-described approach, which will also improve the warehouse's overall operations.