Inventory Counting Procedure | INV102
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The Inventory Counting Procedure offers guidelines to ensure your physical inventory count and inventory ledger is consistent.
This Inventory Counting Procedure applies to all inventory stock from back room, warehouse storage, off-site usage, demonstration or customer loaner purposes. It should be utilized by the inventory control manager and purchasing, sales and marketing, accounting, accounts payable and receivable and warehouse personnel. (12 pages, 2866 words)
It is most important for the Inventory Control Manager to fully understand the POS and accounting system as it relates to inventory, before a physical inventory is taken. This includes an understanding of how the inventory is updated by customer returns, returns to vendors, transfers from inventory to internal use, adjustments for damaged or defective product, and backorders.
The inventory General Ledger balance is affected by every purchase and sale transaction that is processed through the REV102 POINT-OF-SALE (POS) procedure and the Accounting System. To maintain accuracy, one should periodically count the actual inventory on hand and then reconcile that count to the inventory General Ledger balance. Taking a complete physical count of all inventory items is one way to ensure that the balance is accurate.
Inventory Counting Responsibilities:
The Purchasing Manager is responsible for forwarding all paperwork to the accounting manager to ensure that inventory is documented and accounted for properly.
The Sales Manager and the Marketing Manager are responsible for forwarding all paperwork to the accounting manager to ensure that inventory is documented and accounted for properly.
- Inventory Types
- Preparation for Inventory Counting
- Period End Cut-off
- Complete Physical Count-Cost Method or “SKU” Method
- Complete Physical Count-Retail Method
- Cycle Count method
Inventory Counting Procedure Forms
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