Stock Verification

As mentioned earlier, the stock verification is the determination or quantification of the material in stock and checking its deviation from the figures shown in the books. 

The stores manager holds the responsibility for all happenings in the store. He must periodically verify all stocks to reconcile the books with the physical presence of the material. The problems mount as the number of items or the number of transactions increase. Stock verification also checks for pilferage and shows the qualitative upkeep of the stores. The causes for discrepancy in stock can be due to the following reasons : 

1. The scales or weighing machines etc. have not been properly calibrated or are not of good quality or being maintained improperly, 
2. Issues without indents or proper paperwork, 
3. Delays in updating paperwork, 
4. Untrained individuals handling paperwork, 
5. Pilferage, 
6. Obsolescence, 
7. Deterioration and damage due to natural causes like corrosion, insect damage, rodent damage or seepage of rainwater etc., and 
8. Deterioration and damage due to unnatural causes like theft, sabotage etc. 

The process of verification is the physical counting, weighing or measuring the stock of materials that is in stock and making a record of these figures. 

The persons who normally supervise these operations are responsible people from : 

• accounts department, 
• internal audit department of large companies, 
• sometimes, auditors from the bankers or loan givers, and 
• in case of mergers, the representatives of the other company. 

The verification process is normally started only after a clear cut guidelines for the process is written down and approved by the concerned authorities. To prevent overwork or stoppage of normal work for inconvenient time periods, the verification process must be carried out over a long period switching from one area to another. Sometimes, this is not possible and all verification has to be done at one go. 

The stores personnel should be actively involved in the verification process to make it stop seem like a witch hunt. If the discrepancy between actual figures and the book values are substantial enough and not properly explicable, it is necessary to start an immediate investigation as the organisations will gain if the stores personnel are motivated by proper development of an atmosphere of good values and quick justice.