Inventory is one of the most important asset for any business, especially if the business provides products directly to the consumer. To this end, inventory is the real driver of revenue, and as a result, it should be one of the most safeguarded assets for any business. Safeguarding and managing inventory assets can be a time-consuming process, and unfortunately, these assets are often mismanaged, lost, or, at times, stolen. The following tips will help to establish the proper controls to safeguard inventory assets:
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Lock the inventory in a secure area where only authorized personnel are granted access
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Organize the inventory by type and specific location
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Mark all inventory, including scrapped inventory, so that it can be easily identified
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Count and consistently inspect all inventory received from suppliers. Include inspections for correct type and quantity as well as any damaged inventory received
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Create a standardized recording procedure for when inventory is removed, and have those removing any inventory sign-out for it
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Conduct audits of all inventory at least once annually, and a review of obsolete inventory
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Conduct cycle counts by auditing smaller inventory quantities more frequently
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Investigate any negative inventory quantities in case of transaction flaws, thefts, or other causes
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Report all scrap transactions to accounting
Safeguarding inventory assets is one of the most important functions a product-based business can perform. The means through which to safeguard these assets relies on comprehensive planning and a consistent execution process. Rainey Accounting can make this entire process easier and more efficient for your business. Contact us today for a free consultation about safeguarding your inventory assets.
