Stock Audit Services

Keep Your
Inventory
Updated At All Times

Our stock audit services help you keep your inventory and in sync with your business processes.

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Keep inventory updated and track its availability based on your requirements through our stock audit services

Keep inventory updated and track its availability based on your requirements through our stock audit services.

Whether you deal in raw materials or finished goods, it is important to keep a track of the stock in your warehouse(s). You need to verify your inventory, assess its availability,

and track its movement to streamline your business processes. Managing stock holds high importance within an organization as it dictates a range of business processes that follow.

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What Is Stock Audit?

A stock audit is a process of physical verification and assessment of a company’s inventory assets. It involves a thorough evaluation of the stock held by a company on the basis of the assignments received and the business processes carried out. A stock audit allows a company to reduce unnecessary investments in inventory when it has enough stock in the warehouse. A thorough assessment of stock prevents overstocking that may negatively affect your cash flow and incur financial losses.Our stock audit services would include checking your financial statements dealing with inventory to ensure holistic and balanced assessments.

We also help you identify discrepancies in your inventory and correct the same to ensure streamlined business processes. Right from updating stock details to ensuring the proper handling of your inventory, our Corporate services would provide you with extensive reports about stock assessment.

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What Is Stock Audit?

Major Stock Audit Procedures

As the name suggests, physical verification of stock involves counting every unit of inventory that you possess and take it into account. This process can be conducted by physical counting or scanning the units with the help of a bar code scanner.

This helps you in ascertaining the availability of stock with your company at any point in time. Our stock audit services help you in accounting for every unit of inventory and provide you with the details of the same. In case you have your inventory stocked at multiple locations, we would test the inventory in all the locations and confirm all the processes to eliminate any scope for error.

The cutoff analysis involves our team looking into the procedures related to preventing additional inventory to enter your warehouse or shipments leaving the facility during physical counting of inventory. This is to ensure that all extraneous inventory stock is excluded from the stock audit.

Generally, a few last receiving and shipment transactions are tested before the physical count along with the transactions immediately following it. This helps us ensure that all the necessary stock is being accounted for.

We help you in tracking the valuation of your stock obtained from the physical count to the general ledger of your company. This allows us to ensure that the balance is carried forward to the accounting records of your company.

If your stock contains units that are significantly high in value, our auditors will devote extra time to assessing them and counting them in the inventory. We would ensure that these items are valued correctly and help you tracing them to the valuation report that carries them forward to the inventory balance in your general ledger.

Just like the case of high-value stock, our auditors will devote extra time to testing stock units that are error-prone. These items will be thoroughly tested and effective rectification measures will be suggested to you.

It is possible for a few stock units to be in transit when the stock audit is taking place. During such situations, we would take these items into account by referring to documents pertaining to the transit.

We help you in testing the cost of your inventory by comparing the cost mentioned in the supplier invoices with the cost listed in your inventory valuation. This helps you in keeping your stocks and books of account up to date.

Our stock audit services also include an assessment of your freight costs by tracing your freight invoices through your accounting system. This will help us assess how you handle freights in your books of accounts.

Here is an ideal stock audit checklist to ensure that your stock is up to date and well accounted for:

Stock record verifying frequency with physical stock Stock audit software for keeping organized records of inventory, integrated with your financial accounts The process of stock evaluation, cost components of inventory, and method of stock valuation Stock-related MIS format and its contents Physical stock security through CCTV, firefighting equipment, etc. Categorizing inventory into high, medium, and low values

Accounting for inventory with third parties Taking a note of old stock, perishable inventory, and stock nearing expiry date Assessing inventory levels and inventory age Looking for inventory having duplicate software codes

A good portion of your inventory valuation is likely to consist of finished goods. Our team would review the bill of materials for specific finished goods and test the same to ensure that they show the right compilation of components in your finished goods.

If you include direct labor in the cost of your inventory, we would help you trace the labor changed during the production on your time cards to the final cost of your inventory. Also, we would ascertain whether the labor cost listed in your inventory valuation is supported by your payroll records.

If you are adding overheads to the total cost of your inventory, our team would verify that you are using the same general ledger accounts as a source for your overheads. Also, we would test the consistency and validity of the methods implemented for applying overheads costs to your inventory.

In case you have a good amount of inventory that is still “work-in-progress”, we would assess the manner in which you determine the percentage of completion with respect to such inventory.

Our team of auditors would ensure whether the amount you record in your accounts as allowances for obsolete inventory or scrap is correct. This process is based on historical patterns of your inventory, the “where used” reports, and reports of inventory usage. You may be required to create these allowances if you do not have them.

As the name suggests, this is the process of reviewing the purchase records that ensure that the stock in your warehouse belongs to your company and is owned by it.

In case you use a FIFO or LIFO inventory valuation system, we would assess the inventory layers you recorded to verify their validity.

Have a look at some of the key reasons why stock audit is important for your company:

It helps you identify the slow-moving, dead, and obsolete stock in time It allows you to find discrepancies between physical stock and the stock recorded in your books of accounts It helps you update the physical stock to keep it in sync with your books of accounts It helps you ensure that your inventory is stored and maintained adequately

It helps you prevent pilferage and fraud It provides you with the accurate value of your inventory at any given point in time It facilitates reduction of gaps in the inventory management process It serves as a good control mechanism for running your business

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