Inventory count strategies

An important principle of accounting is that asset inventory needs to be correctly valued to ensure that the financial statements of the institution are accurate. Errors is recording the value of ending inventory in one fiscal year result in errors to published financial statements for that year as well as the subsequent fiscal year. Therefore, it is important that accurate physical counts be periodically taken. It is equally important that any system being used to generate inventory valuation, reordering or management reports be based on consistently accurate on-hand balances. At the foundation of conducting an accurate physical count of an inventory is a comprehensive understanding of the process coupled with a written plan. This article presents a guideline of the physical count processes involved in a traditional double-count approach.