The process of assessing the stock maintained in a company’s books and comparing it against your physical stock to ensure they match. It can be conducted internally or at the request of an external auditor. An inventory audit is a process where a business cross-checks its financial records against its inventory records. It is a vital part of the inventory management process. It is done to ensure all records are accurate and uncover any discrepancies in inventory count or financial records.
An inventory audit is a process where a business cross-checks its financial records against its inventory records. It is a vital part of the inventory management process. It is done to ensure all records are accurate and uncover any discrepancies in inventory count or financial records. These audits can also help with inventory forecasting.
Physical inventory count. This is the most common way to perform an inventory audit. It involves physically counting every item in your inventory and comparing the numbers against the numbers in your system.
Inventory cycle count. Similar to physical counting, cycle counting involves manually counting a number of products and comparing them against your system. However, cycle counts are performed regularly on only a select number of products.
ABC inventory analysis. ABC analysis is a process where you group different items by their value. This allows you to store and audit only the particular groups you want.
Cutoff analysis. With this analysis, you halt all operations at the time of the physical inventory count. This ensures there can be no mistakes of uncontrolled variables.
Analytical procedures. Here, you compare your inventory turnover ratio, gross margins, or unit costs with the data from previous years
Overhead analysis. An overhead analysis is an audit of all non-material expenses.
Finished goods cost analysis. This method is ideal for manufacturers and producers.
Freight cost analysis. This analysis evaluates the amount you spend on shipping costs and the lead time involved.
Shipping invoice matching. Auditors often perform this inventory audit at random.
Find companies in Zambia that can run Stock management & auditing services listed here.