Prepare for the Annual Inventory Audit
It’s that time of the year. A lot of organizations have started their annual inventory audit, so they can reconcile with the asset data in their accounting system for the fiscal year ended on June 30, 2017.
The most common method is “Wall to Wall”, i.e. a full physical inventory count. You go through all the physical assets, verifying the location, condition, usage, count. While the “Wall to Wall” inventory method is thorough, it has two major downsides:
- Labor intensive. There is no scale effect. You count and validate asset one by one. You read barcodes and validate them.
- Interruption to regular work. Many departments have to coordinate the inventory audit in order to complete the audits within a certain time period. Some activities, such as receiving and shipping, need to pause in order to have a complete count of assets.
Other accepted methods for inventory audit include “Statistical Sampling” or “Audit by Validation”. If you plan well during the year, these audits can help you to reduce the scope for Wall to Wall audits and therefore minimize the downsides. To understand what they are, you can visit here.
We have also prepared a step by step guide on how to use the eQuip! asset management system to support your inventory audit. You can download the guide here.