A company’s stocks represent cash. They should be stored, checked, and valued periodically, especially at the end of a given period. The value of a stock is usually much greater than the cash held at a particular time. It is, therefore, necessary to verify stock value from time to time to ensure that the materials purchased and stored are, in fact, in the storehouse and their quality and quantity have not deteriorated during the storage process. There is, for this reason, a need for physical verification of socks. Physical stock verification is the process used to ascertain the correctness of goods (e.g., in terms of quality and quantity) in the store on a given date. In physical stock verification, emphasis is laid on the verification of quantity by counting or weighing (or adopting any other suitable means). The following are the main purposes of physical verification of materials lying in the stores:Stock Verification: Definition and Explanation
Purposes of Stock Verification
Stock Verification and Its Purposes FAQs
Stock Verification is a process of confirming the accuracy and integrity of inventory records stored in an organization’s database. This involves physically verifying or counting stock items to compare their actual count with the recorded count in the database.
The main purpose of stock verification is to ensure that accurate records are maintained to avoid discrepancies in tracking inventory, improve operational efficiency and make better decisions based on reliable data. Additionally, it helps reduce shrinkage due to theft or mismanagement, enables effective resource management, and ensures compliance with government regulations.
The frequency of stock verification depends on the size and nature of the organization. Generally, it is recommended to carry out stock verifications at least once every quarter or six months, but more frequent checks can be done if necessary.
The primary benefit of stock verification is that it helps ensure accurate inventory tracking and record keeping which in turn helps maintain an efficient inventory management system. Additionally, it also promotes better customer service by allowing for quick order fulfillment and avoiding any delays due to inaccurate data. Furthermore, stock verification helps reduce losses related to theft or mishandling of inventory as well as aids in compliance with government regulations.
When performing stock verification, it is important to take into account discrepancies in storage locations, transportation factors, and other external factors that can affect inventory accuracy. Additionally, it is also critical to keep track of items that have been returned or damaged during transit. Lastly, it is essential to ensure that all the staff responsible for stock verification are properly trained to carry out the process accurately.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
