Objectives of Stock take

Objectives of Stock take

Stock take is technically term used for physical count of stock at some date. There are number of objective of stock take, which have been explained below;

1.    Missing or theft item identification

Stock take is an effective tool to identify the missing or theft item. Stock take is almost done by each stock carrying organization.

2.    Record Correction

Stock taking also identifies the mistakes in record keeping of inventory. Mistakes in Record may be found & corrected during the detailed investigation of identified variation in physical counting and record. (Stock Ledger)

3.    Damaged Inventory

Physical Stock take also helps in identifying the damaged stock lying in warehouse. Therefore it can be said that stock take helps in removing obsolete or damaged stock from warehouse.

4.    Expired Stock Identification

Stock take is an effective tool for identifying the expiry stock. In some businesses like business of medicines, expiry items must be identified & disposed off in time; otherwise it can prove too costly for organization.

5.    Reporting

Auditor perform stock take to ensure that actual inventory is reported in the financial statement. Inventory is one of the important elements of financial statement and has direct impact on the profitability of the organization.