Economic entities have certain property at their disposal. It may be located in offices, at warehouses, in structural units. Data about everything that the enterprise has at its disposal are reflected in relevant records. These data should correspond to the reality. For the purpose of such compliance verification inventories are conducted. It concerns buildings, intangible assets, tangible assets and so on.
Purposes and frequencies of inventories
Conducting inventories allows the following
- Confirm real existence of all property that is in the books of the enterprise.
- Identify commodities and materials that have lost their original qualities.
- Verify compliance with commodities and materials storage requirements.
- Find excess or lack of property by reconciling real existence and volumes fixed in records.
- Assess completeness and correctness of accounting property value characteristics.
Enterprise management independently makes a decision as to when to conduct such inventory checks and whether it will conduct inventory independently or engage external experts. In the latter case the cost of providing services of conducting inventories will be justified by their quality, operational efficiency and faultlessness guarantees. It is not easy to find a company having employees with good knowledge of the process and its peculiarities who can take impartial approach to conducting inventory. Objective and appropriate services for conducting inventories are offered in «RosCo».
As a rule, inventory is planned after the 31st of December. By this date accountant prepares documents and gets a possibility of making adjustments until the moment of submitting the balance sheet for the previous year. The course of conducting inventory is recorded in accounting policies of enterprises. At the direction of management inventories may be complete and partial (separate areas are analyzed). «RosCo» experts provide services taking into account the following information.
There are conditions that make voluntary process of inventorying obligatory. Those include:
- Property transfer as the result of renting, buying, selling.
- Change of accountable officers.
- Company reorganization that supposes change of owners, legal organizational form, merger.
- Liquidation of business.
- Identifying facts of stealing, property damages, abuses of official position.
- Fires, natural disasters.
Standard operating procedures
Inventory procedure requires establishing a commission.
It shall include:
Chairman is the company head or his deputy.
Managers of structural units.
Representatives of the public.
In addition to standing inventory commissions working commissions are established.
Representatives of the manager who has made the decision that it is necessary to conduct an inventory.
Different experts: accountant, stock manager, economist, production engineer, storekeeper and so on.
It is important to conduct inventory with the participation of experienced employees, familiar with reviewed property, and qualified experts well aware of the subject-matter of this procedure. This service is offered by «RosCo» at reasonable prices.
Composition of all commissions participating in complete or spot inventories is approved by the order of the company head. Dates of commencement and completion of works should b e specified in this document. By the commencement of inventory it is necessary to complete primary receiving reports and expenditure papers processing, make required records in analytical and synthetic records, draw up inventory of property. If at least one of the commission members as absent at the time of conducting audit, its results may be deemed invalid.
If it is a planned procedure, commodities and materials are prepared in advance, if it is a surprise inspection, they are prepared in the presence of the persons participating in this inventory. All warehousing activities are stopped till the moment of this inventory completion. Storekeeper draws up an inventory with receipt that all property is recorded in the cards and the documents are transferred to the accounting department. The verification is conducted using the method of actual counting, weighing on sites (depending on property type and measurement units).
«RosCo» employees can help to do it. The cost of our services is much lower than the costs that may arise as the result of using unprofessional approach.
Documentary inventory accompanying
Inventory is conducted in the presence of materially responsible persons and implies drawing up inventories or acts in two counterparts. The resultant amount of sequence numbers of reviewed stocks and the number of physical data are specified in the document in writing. Last page contains prices and results check marking, together with signatures of materially responsible persons.
They issue a receipt confirming that all commodities and materials recorded in inventory are accepted for custody and there are no claims in relation to them. When the inventory is completed the stocklists are transferred to the accounting department. Accounting department employees verify them, compare them with the data reflected in the records and identify appropriateness/lack/excess.
The verification results are recorded in inventory reconciliation reports. Stocks where discrepancies are identified are entered there. If actual and recorded numbers coincide, only total number of commodities and materials is specified in the report. It is necessary to enter identified excess into the books on the debit side of the accounts attributing it to financial results or increasing funds (for budgetary enterprises).
If discrepancies between stocks existing in reality and data recorded in accounting documents, inventory commission continues with investigating the causes of these discrepancies. Conclusions about the actions that have led to these excesses or shortages, and record them in hard copy in the form of a report. It shall also contain ways of resolving the current situation. Based on the results of spot inventory, an act with actual amounts and quantitative characteristics obtained during the inventory, together with discrepancies (whether positive or negative values) is drawn up. The act is certified by signatures of persons conducting the inventory, chairman and commission members. Separate lists are prepared for rented stocks.
The results of planned intermediate inventories are reflected directly in the reporting documents for the month when they were conducted. If an annual inventory has been conducted at some enterprise, its results are recorded in the relevant annual accounting report.
During the period between complete inventories at enterprises with big commodities and materials stock-list it is reasonable to conduct test checks at sites where the stocks are processed and stored.
Appropriate information recording in inventories and accounting are very important. It is better to entrust professionals with this work. If necessary external experts from the «RosCo» company may be engaged.
If after conducting the inventory mistakes will be discovered in stock-lists You will have to notify the commission chairman immediately and make relevant adjustments in accordance with the established procedures.