Inventory control and stock reconciliation

We reconcile the stock your group holds across its own sites and those of its logistics providers, comparing physical counts to warehouse records and to the inventory value in the ledger. Each difference is traced to cause, recovered or written off, and a count routine keeps the three records together.

The board receives a stock position it uses in the accounts, in lender discussions and in buying decisions.

• A three-way reconciliation of shelf, warehouse system and ledger, by location and product group.
• A variance analysis tracing differences to receiving, picking, returns, damage and system faults.
• A count calendar with cycle-count rules by value and movement.
• An adjustment authority matrix stating who changes a stock record and with whose approval.
• A monthly stock integrity report for the board and the audit committee.

• Stock records match the count line by line, and accuracy is reported by location.
• The gap between the warehouse system and the ledger is stated in currency, and the unreconciled value is reported each month.
• Every stock adjustment carries an approver.
• Count variances close sooner, and the days to close each one are tracked.
• Every location is counted on its agreed cycle.

Stock moves faster than accounting. Goods are received but not booked, returned but not restocked, or counted in a provider's system and absent from the group's. The ledger value drifts from the shelf, and the gap is found only at year-end, when it can no longer be explained.

• The year-end stock count produces a write-down that nobody predicted.
• Your provider's stock report and your own system disagree on units available.
• Customers are sold items that turn out not to exist.
• Gross margin swings between months with no change in prices or mix.
• No one can say who is allowed to adjust stock records.

Finance directors and chief executives of groups whose stock sits partly with third parties, in several locations or across several entities, and who have stopped trusting the inventory figure in the management accounts.

Qasim Abbas brought more than 20 companies across several countries onto one set of numbers, so he knows what records that disagree look like. Your stock counts, warehouse systems and ledger are brought to agree the same way.

We work with the warehouse and order systems on each site and the group's ledger, including Xero, QuickBooks and NetSuite. See how fees work.

What happens to the differences we find?

Each is traced to cause. Recoverable stock is recovered, and the remainder is written up with its cause for the ledger.

Can this cover stock held at a 3PL?

Yes. Provider-held stock is the most common source of drift, and the routine includes the provider's count rights and reporting duties.

Say where stock is held and which figure you doubt most. At a private briefing with the Managing Partner we set out how the three records reconcile before your next close.