Annual inventory audit

Inventorying warehouse stock is a key process for controlling and updating warehouse data. To ensure this process is as efficient as possible without disrupting daily operations, it is carried out according to strict guidelines. Here’s an overview of how inventorying works, what it involves, and what results you can expect.

How Does Inventory Audit Work?

Inventory audit takes place during regular warehouse operations, but specific zones (referred to as inventory zones) are:

• Completely locked - no physical or system movements occur.

• Temporarily “frozen” and inaccessible for stock handling.

Once the inventorying is complete, the zone returns to normal operations.

Inventory audit is free of charge once a year, usually conducted in January or February. The exact date is determined by the warehouse based on stock volume and the complexity of counting, which depends on the type of goods. Clients are always informed about the inventory date in advance.

Preparation Before Inventorying

To ensure smooth execution, the inventory zone is prepared as follows:

1. Zone Locking: Both physically and systemically, no stock movements are allowed in the zone.

2. System Position Check: All stock positions in the zone are reviewed to ensure:

   • No reserved items are present.

   • No incomplete movements are recorded.

3. Temporary Transfers: Items from zones scheduled for inventorying are temporarily moved to auxiliary locations in the system.

The Inventory Audit Process

The inventory audit process involves counting items physically and reassigning them to warehouse positions.

• Missing Items: If an item is missing in the system, it is moved to a missing warehouse position.

• Excess Stock: If the quantity exceeds the recorded amount, the recorded quantity is returned to its position, and the surplus is moved to an temporary location.

Post-count Verification:

1. Temporary Location Irregularities: Remaining items in the temporary location are verified against the actual warehouse state.

2. Data Comparison: The warehouse state before and after inventorying is compared to identify surpluses or losses.

Evaluating the Results

After completing inventory in a zone, a summary is generated:

• Losses: Items recorded in the system but not physically found.

• Surplus: Physically found items are first compared to missing items accumulated throughout the year.

  • Items not reconciled are reimbursed.

  • Remaining surplus items must be received into stock via a stock advice.

Final Inventory Processing

At the end of the inventory process, results from all zones are consolidated:

• A comprehensive overview of all losses and surpluses (including long-term missing items) is created.

• The results serve as a basis for adjusting warehouse stock and improving processes.

What Do You Gain From Inventory Audit?

1. Accurate Stock Overview: A clear picture of what’s physically available in the warehouse.

2. Irregularities Identification: Quick resolution of surpluses and losses.

3. Process Improvement: Opportunities to identify and address logistics issues.

Inventorying is essential for maintaining order and accuracy in the warehouse, ensuring your business runs efficiently. 😊