{"id":14440,"date":"2022-06-16T21:57:59","date_gmt":"2022-06-17T04:57:59","guid":{"rendered":"https:\/\/michaeljbrumm.com\/dcl-v3\/?p=14440"},"modified":"2023-06-06T10:32:39","modified_gmt":"2023-06-06T17:32:39","slug":"inventory-audit","status":"publish","type":"post","link":"https:\/\/michaeljbrumm.com\/dcl-v3\/blog\/inventory\/inventory-audit\/","title":{"rendered":"What is an Inventory Audit? Benefits & Procedures"},"content":{"rendered":"

Companies that stock and sell products and count inventory as an asset, whether raw materials or finished goods, may need a year-end inventory audit. An inventory audit is a physical count of goods in possession or transit. It\u2019s used by the company for internal audit purposes to gain better visibility into their current physical inventory and to ensure the inventory records are accurate. A company\u2019s CPA may require inventory auditing at year-end or another time of year, to confirm an accurate balance sheet or general ledger, so the financial records match the inventory levels.<\/span><\/p>\n

Inventory accuracy not only allows investors to have faith in the company\u2019s accounting records, but a clean audit report shows the supply chain is operating efficiently. Inventory accounting is a cross-check system on SKUs in stock compared to SKUs on the books.<\/span><\/p>\n

A physical inventory can be performed by in-house staff, official auditors, or outsourced to a 3PL company. Those conducting the inventory process can use barcode scanners or a different system to count inventory, whether the counting procedure is tallying each item or spot-checking.<\/span><\/p>\n

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Importance of inventory audits<\/span><\/p>\n

Now that you know what an inventory audit is, let\u2019s look at why they\u2019re important for your retail store.<\/span><\/p>\n

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  1. You can ensure inventory accuracy<\/span><\/li>\n<\/ol>\n

    The biggest benefit of regular inventory audits is that they give you peace of mind. Your business decisions are often driven by data, and each inventory audit gives you real-time data to plan from.<\/span><\/p>\n

    Here are some elements of your store that rely on this data:<\/span><\/p>\n