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                        Stock Count

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                        Stock counts are performed by almost any company in the world. The essence of the stock count is to evaluate the physical quantity of the materials on stock, and to evaluate the economic value of the stock. In other words, a stock count tries to ensure that the quantities and economic value of the stock matches the quantities and values in the stock balance ledgers.

                        The can be many reasons to why differences between the financial ledgers and the physical stock occurs. Some reasons a listed below:

                        • Missing registrations of material flow to production orders

                        • Missing registration of sales

                        • Missing registration of purchases

                        • General loss of materials

                        • Theft

                        • Etc.

                        Normally, administrative workers print out data tables for the physical stock count listing the booked quantities of specific materials to be counted. Then, warehouse responsible workers perform the actual counting and reports back to the administrative workforce. The administrative workforce then controls the result, and may send the missing materials to a re-count. A re-count is normally needed, if the value of the missing/found materials exceeds some predefined level.

                        If a difference in quantity is ultimately booked, the adjustment will typically look accordingly:




                        Stock Balance (Increase Value of Stock)

                        Material Consumption (Negative effect in the P&L)


                        Material Consumption (Positive effect in the P&L)

                        Stock Balance (Decrease value of Stock)

                        If a stock count on multiple materials gives a negative net result, the P&L will get debited with the value credited from the stock balance. The opposite will happen if the net result of a stock count is positive.

                        Date Created: 2014-07-28
                        Posted by: Admin
                        Stock Count

                        Related resources:

                        What is Total Preventive Maintenance (TPM)?
                        What is 5S Production?
                        What is Lean Manufacturing?
                        Kanban Inventory System
                        What is Concurrent Engineering?

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