Accounting

Accounting

´╗┐Inventory Controls
Having the appropriate controls in place over inventory inflow is essential to ensuring that the company financial records, inventory records, and business transactions are handled correctly. The most important inventory control is to lock down the warehouse (AccountingTools, 2014). The inventory should be kept in a gated and locked area with access restricted to authorized personnel only. Inventory should also be kept in an organized manner. Even though organization does not seem to be an internal control, if you cannot find the inventory you cannot control it. All incoming inventory should be counted to insure that the quantity that was ordered matches the quality that the supplier is delivering. When the inventory is counted before it is marked as received it reduces errors in the inventory system (AccountingTools, 2014). Incoming inventory should also be inspected to ensure that it is the correct product and that it is not damaged. If inventory has been damaged it should be returned immediately and accounts payable should be notified not to pay for it. After inventory is inspected and counted it should be tagged with a tag that includes the inventory number, a description of the product, and the quantity it contains (AccountingTools, 2014). This step helps reduce errors that are caused by mis-identifying products. After inventory is received there are many different controls that need to be put into place to ensure that inventory is controlled while it is in custody inside the warehouse and as it is moved to be purchased and shipped from the warehouse.
When a customer purchases an item and it is picked from the selves to be shipped there needs to be a procedure in place to record the pick as soon as it leaves the warehouse. This is best controlled with a secure gate so that no inventory can leave the warehouse without being recorded. If inventory is removed from the warehouse for any other reason besides picking it must be signed for....

Similar Essays