How ERP software helps in Improving Inventory Auditing

Home
How ERP software helps in Improving Inventory Auditing

inventory auditing, erp inventory auditing

How ERP software helps in Improving Inventory Auditing

0 Comments

Inventory management is one of the key module of an ERP system for trading & Manufacturing business. Auditing Inventory is important to understand timely and accurate fulfillment of orders which also determines the business profitability. An ERP software helps manufacturers and traders to plan and budget the forecasting of inventory with various advantages. ERP software helps you with proper inventory tracking and increase efficiency to mange it in more proper way.

Why Inventory Auditing is important : Objectives

Managing and maintaining favorable inventory stock is important, as too little inventory can’t meet customer demands and excessive inventory in the warehouse may took up the space as well as undue investments. Enterprise Resource Planning software helps you to update inventory in real time within the system but it is good to verify the actual stock total on regular basis.

There are typically various method of auditing the inventory some of them include Cutoff analysis, Observe the physical inventory count. Reconcile the inventory count to the general ledger. Test high-value items etc. But as ERP is concerned mostly Cut-off Analysis, (Cycle counting) and Observe the physical inventory count is used for inventory audits as these both the methods are enhances in today’s ERP software & solutions.

Cycle Counting

If the company uses cycle counts instead of a physical count, the auditors can still use the procedures related to a physical count. They simply do so during one or more cycle counts, and can do so at any time; there is no need to only observe a cycle count that occurs at the end of the reporting period. Their tests may also evaluate the frequency of cycle counts, as well as the quality of the investigations conducted by counters into any variances found. IN this method of Inventory auditing the company utilizes a small sampling of company inventory to understand the whole inventory in the entire warehouse. This method of auditing is simple, quick and accurate.

Total Physical Inventory

In total Physical inventory audit the company reduce the operation to count each and every inventory. Based on Cycle counting the results are accurate but to execute this process the time require is more.

ERP Software & Inventory Auditing

ERP software audit is nothing but an investigation to various aspects of an organization in order to understand the adequacy of the ERP solution. It allows understanding whether the processes and records are proper or not. As ERP consist of various Modules for different departments there are various department who would like to perform audit such as Sales audit, Purchase Audit etc. If your business is using any ERP software which includes inventory management and tracking then surely your processes are streamlined as you get complete access to the date and the transaction within few clicks.

How ERP software enhances your Inventory Auditing:

You can streamline your inventory management process by integrating bar code and scanners .
ERP software helps employee with proper location of the raw materials, and finished good that need to be counted.
ERP software offers you with real time updates to each and every concerned departments.
ERP software allow you to get proper reporting of all the department including inventory reports this build confidence of the share holders and stakeholders.
Manual entries, counting of inventory is reduce with the help of ERP system therefore it also saves time.

How Business can monitor inventory performances and take corrective measures – Checklists

• By creating traceable records and assigning SKU’s, Expiry dates Serial & Lot number including Attributes and Unit of measure.
• With addition of notable attributes to products and providing information on the location of items within the warehouse, storage requirements, sales rates, special handling, and other important particulars
• Keeping track of expiry stock dates.
• Removing inventory of products which is not profitable based on historic data.
• Monitoring of in-bound stocks and provides up to date information on the availability
• Linking multiple suppliers to each item to eliminate gaps in availability
• Breaking down costs by overhead, materials, shipping, and more to get the true cost to value

Read our More articles