Things to Know About Inventory Reconciliation
Since inventory is vital to any business, it is quintessential that it is managed in proficient manner. A business takes wise decision if its inventory is managed well. When we talk about inventory reconciliation, it involves performing tasks such as reconciling fixed assets inventory, preparing inventory report, etc. Inventory record keeping should be managed accurately.
There are basically two types of inventory reconciliation: physical and accounting. One can take a written inventory record and can compare it to the actual goods stored in the company’s warehouse. Counting damaged and obsolete products is also vital. When inventory reconciliation is done, it is to be seen that all inventory purchases are included.
The most common type of inventory reconciliation processes that are performed in most of the companies includes perpetual and periodic inventory reconciliation. The periodic inventory system include recording of financial inventory information periodically.
On the other hand, perpetual inventory process includes reconciling inventory after every purchase, sale or ledger to the general ledger account. Most of the companies use this method, especially companies having individual or unique inventory products due to a large variety of goods stored in warehouse.
Besides, there are some things that need to be done for accurate inventory management such as:
- Recounting the inventory
- Matching the units of measure
- Verifying the numbers
- Examining scrap, etc.