Physical Stock Verification & Perpetual Inventory Control System
- May 1, 2020
- Posted by: Admin
- Category: Blogs
Physical Stock Verification:
Physical stock verification in which bin cards and store ledgers are reconciled with the actual physical stock.
Physical stock verification is a process of inventory control, throughout this process entire stock is verified all at a time at periodic intervals and usually done in a year.
The physical stock count process is important for Wearhouse, stores that do not find a place in the perpetual inventory records. Like. WIP, spare parts, and consumable materials.
- The advantage of this method is that a thorough check of all the inventories materials is performed at a time and all the discrepancies are known collectively.
Perpetual Inventory Control:
The perpetual inventory’s main objective is to provide details regarding the quantity and value of each stock material after every physical movement.
Perpetual inventory control means recording store balances after every receipt and issue to facilitate regular checking and to disclose the closing balance of stock-taking.
This system will help the users in planning purchases, reduces possibilities of stock shortage, and reduction of waste.
- The advantage of this method is that the store not to be shut down for some time. Only minimum quantities are counted.
Physical Stock Verification System Vs Perpetual Inventory Control System
|Parameter||Physical Stock Verification||Perpetual Inventory Control|
|Method of Verification||Two types of method:
1. Periodic Stock Verification
2. Continuous Stock Verification
|Using the following method:
1. Bin Cards
2. 2. Store Ledger
|Recording||The purpose of physical stocktaking is to check the actual inventory present in-store and warehouse||The purpose of perpetual inventory control is just a recording of material received and issues.|
|Time||This method consumes much time as stock is checked after every movement||This method does not consume much time as entries can be made in less time|
|Control of inventory||High level of control as management knows the quantity at any given time||No control as management is unaware of quantity until the end of the period|
|Work||Depending upon materials involved, this checking can be made by counting and weight||Only clerical work is required for entries of material received and issued|
|Effect||Normal and routine work will be affected||Normal and routine work will not be affected|
|Cost||Expensive to maintain.||Cheaper to maintain.|
|Period||This process is done on a weekly, monthly and yearly basis||This control is required only when the material is received or issued|