Inventory audits involve reviewing past records, examining non-sales detractions, and physically counting products with a handheld scanner to ensure correct quantities and prices.
Conducting an inventory audit is a time-consuming process, especially in large stores and warehouses, but it is not a difficult procedure. The auditor starts by looking at past inventory count records so he knows how much stock should be in the store or warehouse. After that, the auditor examines the documents that harm the overall inventory. The auditor then visits the store or warehouse and performs the inventory audit with a handheld device that scans and counts the product. In addition to counting inventory, the auditor will also check prices to ensure that no products are being sold at an inaccurate price.
Warehouses and stores keep records of all product movements. These records detail how much product was purchased, when it was delivered, and how much was sold. In order to know how much product there should be in the store or warehouse and to understand the establishment’s ordering practice, the inventory auditor will review the last few months’ documents, perhaps the previous year’s figure, before performing the audit. This helps the auditor to observe suspect ordering practices and understand store or warehouse ordering trends.
Along with the order, there are usually documents that detail non-sales detractions from inventory. These documents count the number of thefts, defective products, returns that cannot be put back on the shelf, and anything else that leaves an item unsold or out of the store. To properly perform an inventory audit, the auditor must know this information so that he or she knows the correct amount of product in the store or warehouse.
The actual inventory audit takes place when the auditor physically goes into the store or warehouse and checks all the products, usually with a handheld scanner. Each product or case is scanned, the scanner takes the product barcode and tracks the number of that specific item in the store. This number is compared to ordering and sales documents to ensure the store has the correct quantity of products. If there are not enough products, the auditor will usually need to investigate to find out what caused the imbalance.
Along with the number of products, the inventory audit also verifies the correct price. The hand scanner will usually detail the item’s correct price, and the auditor can check the item’s tag to ensure nothing is being sold too high or too low. This helps the chain of stores coordinate sales and ensures that the company as a whole is making great profits.
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