1. What is inventory?
Inventory control is a routine activity performed by businesses to take inventory of goods in stock to capture the difference between the book number and the actual quantity. Normally, the inventory control is done on a weekly, monthly, quarterly or yearly basis depending on the size and quantity of goods of that business. Inventory control is usually assigned to warehouse staff, but business owners can also delegate authority to other employees or hire the inventory service of an Auditing Company that has inventory experience. to perform this inventory work.
2. Why do businesses have to inventory goods – warehouses – assets?
To close the inventory of raw materials, goods and assets at the time of inventory, calculate the cost of products.
Understand the status of the company’s resources at the end of the accounting period.
When buying, selling, merging or splitting companies.
When there is a transfer of warehouse and accounting personnel.
When there are special administrative requirements of the Board of Directors.
To help you better understand the inventory service, AACS Auditing Company provides some more information about this inventory service:
Inventory inventory process
The inventory process consists of 3 steps
Step 1: Prepare inventory
To prepare for this step, businesses need to perform the following steps:
Review all items, especially items: near-date, damaged, defective… then proceed to liquidate or destroy so that the inventory takes place smoothly and quickly.
In order to avoid missing goods as well as make inventory easy, it is necessary to delimit the inventory area depending on the size of the business.
Check the quantity of goods.
If inventory activities will affect delivery time or import goods from partners, businesses need to notify them so as not to lose their reputation.
Step 2: Conduct inventory
Usually an accountant, a store owner or an external company partner such as an auditor is responsible for taking inventory to ensure that the results of the inventory are accurate and objective. The inventory should pay attention to the following issues:
The inventory record must be used as a basis. From inventory management software, or get from daily inventory reports and stock cards to get a list of goods for easier inventory.
Check and compare data after inventory:
If all the figures match the report, that’s what every business wants. But in the event of a deviation, the person responsible for the inventory must account for this. This deviation can be caused by many reasons such as: wrong daily reports, sales but do not scan barcodes or record books, due to loss of goods, due to loss when moving…
Step 3: Statistics, summarizing data after inventory
After the inventory, the next step is to compare the actual data with the book data and correct it with the actual number.
Here are a few notes to note the smooth running of inventory:
The inventory should happen periodically and have a plan for everything. Need to compare the inventory with the books, or warehouse management software.
Goods in the warehouse should be arranged in a scientific and reasonable manner, with warehouse tags or labels. This both makes inventory management easy and creates favorable conditions for quick and accurate inventory control.
There should be documents for the relevant people to confirm during the inventory process. This is the basis for attributing responsibility if unexpected circumstances occur.
3. A few notes to make inventory inventory run smoothly:
The inventory should happen periodically and have a plan for everything. Need to compare the inventory with the books, or warehouse management software.
Goods in the warehouse should be arranged in a scientific and reasonable manner, with warehouse tags or labels. This both makes inventory management easy and creates favorable conditions for quick and accurate inventory control.
There should be documents for the relevant people to confirm during the inventory process. This is the basis for attributing responsibility if unexpected circumstances occur.
Following the correct steps in this standard inventory process will help the process to be most effective. However, depending on each business, there are other adjustments to suit.
4. How to control stock?
Simple way to manage inventory, avoid loss
Organize the warehouse neatly. The first condition for easier warehouse management is to always keep the warehouse space clean and tidy. …
Label goods. …
Use the inventory card. …
Check stock regularly. …
Limit employee access to the warehouse. …
Use specialized software to manage inventory
5. Methods of inventory control
Method of regular declaration
Follow up regularly, continuously, systematically
Reflect the situation of import – export warehouse, goods in stock
Export value can be calculated at any time
Value of ending inventory = beginning inventory + value of inventory in the period – value of inventory for the period.
Subjects of application
Production units such as industry, construction, installation, etc.
Commercial units dealing in high-value items such as machinery, equipment, etc.
Periodic declaration method
Reflecting the inventory at the beginning and the end of the period, not regularly, continuously and not for each import and export in the period.
The value of goods exported in the period can only be calculated at the end of the period.
Value of goods exported = value of inventory at the beginning of the period + total value of goods in stock during the period – value of inventory at the end of the period
Subjects of application
Units dealing in low-value, large-quantity items of various types, specifications, and designs
Units produce only one type of product or goods.
Accrued accounting work at the end of the period
Checking is not regular, so it is impossible to know for sure the situation of import and export, which will limit the accounting process
It is difficult to detect errors, and it is even harder to determine the cause of these errors
6. Process of inventorying assets, inventory
Asset inventory procedures are carried out in a number of steps as follows.
Step 1: Establishment of an inventory inventory committee, an asset inventory…
Step 2: Conduct inventory inventory at affiliated units. …
Step 3: Summarize inventory data. …
Step 4: Process data, make a report on inventory results…
Step 5: Report on Inventory results
The cost of inventory service usually depends on the following factors if the business outsources to perform inventory service:
- Inventory location.
- Types of assets, goods to be inventory, packing specifications and proportions of goods at each warehouse.
- Customer-specific inventory requirements
- Number of employees on each warehouse to be counted.