Inventory Verification Service in UAE
"Inventory is money sitting around in another form," - Rhonda Adam
Inventory Verification significantly reduces the company’s inventory loss, assuring management that the inventory presented in the financial statements is reliable. Inventory is the most valuable asset of any business and the most vulnerable to extortion, fraud, waste, and damage.
In accordance with International Accounting Standards (IAS 2), inventory is the asset held for selling in the regular business course, in producing goods for resale and in the form of materials or supplies to be consumed in the process of producing goods or providing services. Per IAS 2, inventory is measured at lower of cost or net realizable value.
What is Stock Taking or Inventory Verification?
Inventory Verification or Stocktaking is the physical examination of a store’s stock or inventory at regular intervals. Inventory Verification or Stocktaking is performed periodically, typically when accounts are closed / financial statements are prepared for external purposes.
Goals of Inventory Verification
- Confirm the accuracy of store records.
- Prepare the organization’s final financial statements.
- Disclose instances of fraud, theft, and stock loss.
- Identify any flaws in the system of storage and inventory management.
Purpose of Conducting Inventory Verification
The primary objective of inventory verification is to determine the presence of the current stock and its realizable value. Inventory can be an asset with several day-to-day moves, so daily inventory verification is a tedious chore for any organization.
Stock management is essential to accomplishing overall business objectives. Stock management is the process of managing and maintaining an appropriate stock or inventory level in a firm and ensuring that stock is available when needed. Physical stock control describes:
- Receiving
- Movement
- Inventory Storage
- General Physical Inventory Management
Types of Inventories
Raw materials
The goods needed to create the company’s product are referred to as raw materials.
Work in progress
In a firm, semi-manufactured or semi-finished products are referred to as work in progress.
Finished goods
In a firm, semi-manufactured or semi-finished products are referred to as work in progress.
Stocks
The firm’s unsold inventory is referred to as stock. Opening stock / opening inventory refers to the number of unsold goods at the beginning of the period, whereas closing stock / closing inventory refers to the amount of unsold inventory at the end of the period.
Stock Turnover
Internal audit identifies areas for process improvement, cost reduction, and operational efficiency. By analyzing business processes and controls, internal auditors provide valuable recommendations to enhance productivity, streamline operations, and optimize resource allocation.
Benefits of Inventory Verification
Assurances to Principals
Periodically checking your inventory is a great way to make sure everything is accounted for and where it should be. This process helps to identify any discrepancies between what’s physically on hand and what’s recorded in the accounting system.
Efficient Inventory Control
An accurate account of inventory is crucial for any business. Our system ensures that your working capital requirements and cash flows are well planned, minimizing the chances of ‘surprises’ down the road
Protect Your Investment
It’s important to have a system in place that safeguards your inventory. Physical verification helps reduce the chances of lost or stolen goods and keeps your assets secure.
frequently asked questions
Inventory verification is the process of ensuring that an organization's inventory accurately reflects the actual physical stock. This involves auditing an organization's existing records and comparing them to the physical stock in order to identify any discrepancies or inaccuracies.
It depends on various factors, such as the size of your organization, how many different types of products are being stocked, and how often new items arrive or leave your warehouse. Generally speaking; however, most organizations will perform an annual physical count as well as periodic spot checks throughout the year. Conducting regular stock takes helps maintain accurate records and prevents errors from accumulating over time due to incorrect data entry or erroneous assumptions about stock levels.
Effective inventory management requires careful planning, monitoring, and control over all aspects of your supply chain, from sourcing materials through production to delivery and customer service.
Why Choose ADEPTS
Expertise and Experience
At Adepts Chartered Accountants, our team consists of highly skilled professionals with extensive experience in managing complex regulatory and accounting standards. We are proficient in both local and international regulations, ensuring our services are accurate and fully compliant.
Tailored Solutions
Recognizing the unique nature of each Business, we offer customizable services designed to align with your specific needs and business objectives. We collaborate closely with you to understand your requirements and deliver solutions that achieve optimal results.
Time and Cost Efficiency
By choosing our services, you benefit from significant savings in time and resources. Our solutions are engineered to be cost-effective, providing high-quality support without the need for substantial internal investment.
Accuracy and Compliance
We prioritize accuracy and compliance in every aspect of our service. Our meticulous approach and rigorous procedures ensure precision and adherence to standards, reducing the risk of errors and the potential for non-compliance penalties.
Dependable Service
Dedicated to delivering reliable and consistent services, we aim to build long-term relationships with our clients based on trust, integrity, and mutual respect.
