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1. Periodic Stocktaking
The objective of periodic stocktaking is to find out the physical quantities of materials of all types at a given date. This is a substantial task even in a modest organization and becomes difficult if not impossible task in a large firm. The following factors should be considered:
(i) Adequate number of staff should be available who should receive clear and precise instructions on the procedures
(ii) Ideally the stock take should be done on a weekend so as not to interrupt with production
(iii) The stock take should be organized into clearly defined physical areas and the checkers should count or estimate all materials in the area.
(iv) Adequate technical assistance should be available to identify materials, part no?s etc. far greater errors are possible because of wrong classification than wrong counting.
(v) Great care should be taken to ensure that only valid stock items are included and their correctness.
(vi) The quantities of each material should be checked against the stock record to expose any gross errors which may be due to stocktaking errors or faults or error in recording system.
(vii) The pricing and extension of stock sheets, where done manually, should be closely controlled. Frequently the pricing and value calculations are done by computer, the only action necessary being to input quantities and stock and part numbers.
2. Continuous stock taking
To avoid disruptions caused by periodic stock taking and to be able to use better trained staff, many organizations operate a system whereby a proportion of stock is checked daily so that over the year all stock is checked at least once and many items particularly the major value of fast moving items, would be checked several time. Where continuous stock taking is adopted, it is invariably carried out by staff independent from the storekeepers. Continuous stock taking is absolutely essential when an organization uses what is known as the perpetual inventory system. This is a stock recording system whereby the stock balance is shown on the record after every stock movement, either issue or receipt. With this system the balances on the stock record represent the stock on hand and the balances would be used in monthly and annual accounts as the inventory system is functioning correctly and that minor stock discrepancies are corrected.
Wilfykil answered the question on April 17, 2019 at 06:30
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