In order to address client demands, every organization has to maintain the sufficient inventory level for uninterrupted supply to their customers. Inventory audits help identify gaps/improvement opportunities related to inventory process such as availability of sufficient stocks, re-ordering levels and requisition to replenish the wiped stock, inventory receipt/ issuance process etc. During the inventory audits, auditors also evaluate the physical stock found at Warehouse v/s stocks maintained at companies book stock (ERP).
An inventory process audit shall cover following areas / aspects related to inventory management
Stock Verification Audits–During the inventory audit , auditor physically goes to the store or warehouse and checks every product physical count vs the ERP count and also cross checks whether products are placed as per the defined location in WMS.
Cycle Count: - Cycle count approach allows for a portion of the inventory to be physically counted during each month or decided intervals of the year. This allows the physical inventory to be incrementally reconciled throughout the year, and helps to minimize reconciliation process when the full annual physical inventory count is conducted.