What is an Inventory Audit Checklist?
An inventory audit checklist is a document inventory managers can use for inspecting their stocks, auditing them and their status, and analyzing the movement and usage of goods. It is often premade and templated prior to audits for easy use.
Importance and Benefits
For businesses that regularly deal with the movement and usage of goods, an inventory audit checklist is essential. Regular inventory audits stand out as a cornerstone practice, offering a myriad of benefits that extend far beyond mere compliance. With a dedicated checklist, this process is streamlined, thus allowing for more efficient work practices and a better process.
In particular, an inventory audit checklist helps with the following:
- Managing finances and ensuring that the recorded value of inventory mirrors its physical existence
- Preventing discrepancies, unnecessary spending, and workplace injuries brought on by inventory management
- Reducing inefficiencies, minimizing stock-outs or overstock situations, and optimizing resource allocation, leading to improved overall operational efficiency
- Complying with industry regulations, minimizing the risk of penalties and legal repercussions, and fostering a culture of transparency
- Creating and implementing new auditing procedures based on previous audits done with the checklist and issues recorded
What to Include in an Inventory Audit Checklist
An inventory audit checklist typically includes fields for the following:
- Date the audit was conducted
- Name of person or people responsible for the inventory audit
- Date of last inventory audit and who performed it
- Presence and status of the inventory audit plan
- Status of inventory stocks
- Historical issues of the inventory, such as:
- Past overstocking
- Past understocking
- Consumables expiring
- Status of necessary sensors, monitoring devices, and tracking devices
- Competency of inventory staff and managers
- Status and operational status of entry and exit points and locks
- Condition of receipts
- Condition of inventory scales and their usage
At the end of the audit, you should include a sign-off section for the auditor-in-charge. This will then verify the validity of the checklist and the credibility of the auditor, as well as make it accessible to track possible issues and changes in the future.
How to Use It
An inventory audit checklist can be used in the following ways:
- For general quality audits
- For analyzing data on inventory usage, problems encountered, and supply status
- For creating a more efficient and standardized inventory management system
Here is a sample inventory audit checklist in use for your reference:
FAQs about Inventory Audit Checklists
Inventory management entails all tasks of inventory supply and movement, such as the stocking process, the usage of stocks, and their sale. On the other hand, an inventory audit refers to the act of inspecting stocks, management practices, and other procedures related to inventory management.
There is usually a dedicated inventory audit manager responsible for conducting inventory audits and using the necessary checklist. However, in some cases, it is the inventory manager themselves who is responsible for it, or their employer.
Inventory audit checklists are not required by law, but some businesses require them for their staff to streamline the auditing process. It would be best to have a checklist for this exact reason, as well as because it helps inventory managers and business owners better understand their inventory and identify and address possible issues.