Stock audit, also known as inventory audit, is the process of verifying whether the physical goods available at your store’s warehouse match the results available at the stock registry. Inventory audits can be conducted inside the company or via the outside auditors who can ensure maximized transparency in the results.
Every business that relies on physical goods should be familiar with conducting inventory audits. However, stock reviews are particularly important for eCommerce operations, since their products can be scattered globally across various warehouses and logistics facilities. Here, a stock audit is the only way to track and manage all the products efficiently.
Auditing inventory is directly related to your profit calculation. If some of your items are missing or misplaced, it’s the same as if money were missing or misplaced. That’s why investing in timely inventory is needed for accounting purposes and profit & loss statements.
Stock audits can help you improve the financial health of your business. By conducting a thorough analysis of the current status of your physical goods and the frequency of their purchase, you can gain insights into parts of your inventory that sell poorly or underperform in any other way.
Inventory management helps you prevent or identify fraud and/or theft. If your stock audit reveals any discrepancies between the recorded goods and their physical equivalents, it could be the result of these unfortunate aspects of inventory storage.
Stock auditing may become one of the most important procedures carried out by a business, as it reflects part of the current financial state of the company. More importantly, a thorough stock audit can help business solve existing issues as well as prevent future ones.
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