Accurate inventory information is one of the most crucial elements of any retail operation. A crucial asset in a retail company’s financial statements is the declared information in its inventory. This crucial information is needed by the company’s investors and can be the foundation for obtaining bank loans.
An inventory audit is required to guarantee the precision of the inventory data. But, what exactly inventory audit is and the procedures to conduct it?
In this article, we will let you know everything you must know about warehouse inventory audit. So, here we go!
Warehouse inventory audit
What is Inventory Audit?
An inventory audit or stock audit makes sure that a company’s inventory records and physical inventory count are in line with its financial records.
What are the Important Parts of Inventory Audit?
Internal control evaluation
Physical stock verification of stores
What are the different Audit Procedures to carry out an Audit?
There are many types of audit procedures for inventory you can use while carrying out an audit. The different audit procedures for inventory are as follows:
Cutoff Analysis
When conducting an inventory, you pause operations and perform a cutoff analysis. This means delaying the shipment of goods or the receipt of stock. Any new stock received during this time is typically kept in a separate location and not counted.
Physical inventory count
The purpose of the physical inventory count audit procedures is to confirm that the stock records you have on your system correspond to the actual stock.
ABC Analysis
You might want to use ABC analysis if you stock goods with a range of prices. Here, you would combine items of various values and volumes. For instance, you might group all of your high-value ("A"), mid-value ("B"), and low-value ("C") products.
Bonus- Make Your Warehouse Inventory Audit Effective
For the retail operations to carry out an effective warehouse inventory audit, you must make sure your bins, shelves, products, and assets are all properly labeled.
If the shelves, racks, and products in your stores and warehouses are not properly labeled, performing a physical count during an inventory audit would be very challenging. These labels provide details about the product name, SKUs, location, and other crucial details.
Many stores continue to use outdated paper- or sticker-based labels. So, what would you do make your inventory audit effective. We have a bonus for you.
Use the modern Electronic Shelf Labels/ E-link Labels to streamline your inventory audit process as well as your overall retail and warehouse operations.
How electronic shelf labels syetem works?
Benefits of Electronic Shelf Labels
· User-friendly and interactive digital displays.
· Provide additional information in a real-time manner.
· The service life of ESL is long.
· Its battery is replaceable.
Conclusion
The data gathered from inventory audits are essential for your stores' and warehouses' optimal performance, which can have an impact on your company's bottom line and long-term viability. So, to carry out an effective warehouse inventory audit, use best stock audit services like Electronic Shelf Labels/E-link Label.