Stock Verification: Definition and Explanation
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.
Purposes of Stock Verification
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:
- To examine the correctness of the stock records
- To examine the correctness of the values entered in the stock record
- To detect discrepancies, if any
- To find weaknesses, if any, and to suggest improvements
- To safeguard against staff abuses