Ecommerce Fulfilment Services

Stock Audit

stock audit

A stock audit, also known as an inventory audit, is a process used by businesses to verify the quantity and value of physical stock within their premises against the inventory records. It helps to ensure accuracy and detect any discrepancies or issues that may affect inventory management and financial reporting. This is often a requirement for businesses to satisfy auditing standards.

Process

The process of a stock audit usually includes the following steps:

  1. Planning: This involves determining the timing and scope of the audit. It may be conducted at regular intervals (such as annually), or it could be triggered by certain events like a significant discrepancy in inventory counts.
  2. Physical Counting: The auditors will physically count the items in the inventory and record their findings. This is typically done by category or location to ensure that all areas of the inventory are covered.
  3. Verification: The counts obtained from the physical counting are then compared with the records in the company’s inventory system. Any discrepancies are investigated to determine the cause.
  4. Reconciliation: If discrepancies are found, they are corrected, and adjustments are made to the inventory records. The reasons for the discrepancies are also documented for future reference.
  5. Report: A report is prepared detailing the audit findings, including any discrepancies found and the corrective actions taken.

Importance

Conducting a stock audit is crucial for businesses for several reasons:

  • Accuracy of Financial Statements: Inventory is a significant part of a company’s assets and has a direct impact on its financial statements. Discrepancies in inventory records can lead to inaccuracies in these statements.
  • Inventory Management: Regular stock audits can help identify issues with inventory management, such as shrinkage due to theft or damage, which can then be addressed to improve operational efficiency.
  • Regulatory Compliance: Certain industries or businesses may be required by law or industry regulations to perform regular stock audits.

More Fulfilment Terms

Order fulfilment refers to the steps involved in receiving, processing, and delivering orders to end customers.
First mile delivery refers to the initial stage of the delivery process, where the items are collected from the seller and transported to the courier's warehouse or directly to the distribution centre.

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