Stock verification defined as the physical counting, weighing, or measuring the stock materials held and making a record of these figures.
Mostly it is an annual exercise coincides with the closing of accounts.
The warehouse in charge is responsible for the safe custody of the largest current asset of the balance sheet. They are raw materials, machinery spares, finished and semi finished goods.
In order to avoid discrepancy in stocks, constant review of stocks, up to date posting, reconcile the physical and book balances are of prime importance.
The main objective of the verification process is to identify the weaknesses in the operations of the warehousing system.
To ensure the input, output and stock on hand accounted for accurately.
Ensure proper placement of materials.
It also helps to identify slow, non-moving and obsolete items.
The chances of collusion amongst the various staff members may be to detect.
The purpose is to set up records as the basis for control and secondly to pass on accountability from one department to another.
Science there is always a pressure to complete stock verification exercise quickly; this may be ineffective and nullify the advantages.
To overcome this drawback, we require adopting continuous monitoring or perpetual inventory taking. In this case, materials verified throughout the year, a few items daily.
It will be advantageous to have the high value items verified more often.
Arrange verification of the high value items at the time of issue or receipt of these items in order to avoid accumulation of errors.
The primary purpose is to assure that inputs, outputs and the stock on hand have been accounted for accurately. A careful planning, well organized and executed stock verification will give tremendous advantages to the organization.
Take care to avoid double counting and omitting some items.