Inventory Dictionary and Other Interesting Facts

A process of determining the actual state of company’s assets, stock, and liabilities, verifying whether everything matches accounting records. It’s part of the broader stocktaking process.

Includes inventory counting, which is the process of determining the actual state of assets, and comparing it against accounting records, followed by calculating inventory differences and finally recording them.

Recurring checks that can be conducted monthly, quarterly, or according to internal regulations. The goal is to continuously verify alignment between accounting records and actual stock levels.

This is an inventory count where the status and quantity are physically checked by internal staff or external inventory service providers, performed for tangible assets.

Usually performed for bank accounts, receivables, payables, and types of assets where physical inventory isn’t possible, for example due to their intangible nature.

Database or data file of all current assets throughout the company’s existence, typically containing internal item numbers, barcodes, names, units of measure, and unit purchase prices. Serves as the primary database for LISW.

A data file containing current asset items with non-zero stock levels; this import is used after inventory completion and serves for overall stocktaking and difference calculation.

This is a data file that customers receive after Leite completes the stocktaking. This file contains the same information as the data import plus differences for individual items.

Inventory aims to identify differences between records and reality, with three possible outcomes: Accounting balance matches physical count (ideal), or there are positive differences (surplus) or negative differences (shortage).

Advisory and control body for asset inventory, which prepares a signed report about the inventory results in the company

A record of inventory results showing actual states of assets and liabilities; serves as evidence for accounting and must be signed by responsible persons.

Every company that has any stock, assets, or cash registers is required to conduct physical inventory. This obligation is mandated by Section 6(3) of the Accounting Act. If stocktaking isn’t performed, the accounting is considered unverifiable under Section 8!

Defined by the Accounting Act (Sections 29 and 30), which requires accounting units and companies to conduct inventory at least once per accounting period, meaning at least annually (typically on the balance sheet date).

This involves counting the same assets by two independent inventory takers, followed by comparing their results and investigating any differences; after corrections, difference investigation follows; it’s a very accurate but also one of the most expensive forms of inventory.

The process of comparing physically counted quantities with accounting records, where Investigation follows the inventory count and is part of the overall company asset stocktaking. The goal is to determine the cause of differences and implement corrective measures or record corrections.

Used to mark locations during inventory, where such labels must always be completely unique, ideally marked numerically or with a logical alphanumeric combination.

Unique and unmistakable asset marking used for tracking and easy location, typically a stock card number, barcode, QR code, or RFID code.

For any inventory (especially larger ones), it’s advisable to divide the area into smaller locations, which could be rooms, warehouse sections, shelves, or shelf levels; having space divided and marked this way is an important part of inventory preparation that can save lots of time during the process!