Inventory is represented by a special procedure for reconciling the existing values, goods, money or fixed assets of the company with those values that are available in the official documents of the company. It can be carried out without fail or at the initiative of company management. An inventory is mandatory for some companies, and this process is certainly carried out every year in all firms. The main purpose of this procedure is to identify various discrepancies and shortcomings. Many firms do not realize the value of this process, so it is used only as a formality. Although if you correctly approach the inventory, then with its help you can identify all the shortcomings or surpluses.
Process purpose
Many start-up entrepreneurs think about whether an inventory is necessary and what goals can be achieved through this process. The procedure is represented by systematic accounting of material assets and means, for which a comparison of actual indicators with data from official documents is performed.
The main purpose of the inventory is to identify discrepancies. They can appear for various reasons:
- impact on the values of factors of a natural nature, therefore, this includes shrinkage, spoilage due to improper storage, evaporation or losses that occur during the transport of goods;
- illegal actions on the part of company employees, for example, taking improper measurements, allowing body kits, or even theft of valuables;
- problems that arise during accounting, therefore, various errors, corrections, inaccuracies, clerical errors or other ambiguities in documents are often identified after an inventory.
Based on this, a systematic audit allows any company manager to timely identify various violations and problems.
Validation Functions
An inventory of goods necessarily involves the use of various functions of the procedure:
- Objectively evaluated are the conditions under which the storage of various goods is made, and such an assessment is objective.
- It is determined how correctly and correctly various documents are maintained in the company.
- The features of the warehouse facilities in the company are reflected.
- The completeness and accuracy of accounting is assessed.
- The prevention of various abuses and violations by hired specialists is being provided.
Due to these many functions, taking an inventory is considered an important process in any company.
Cases of mandatory inventory
Some companies must carry out the procedure without fail on the basis of legal requirements. Information on when an inventory is necessary is contained in the following regulations:
- in the Federal Law No. 402 “On Accounting”;
- in methodological recommendations approved by Order of the Ministry of Finance No. 49.
Without fail, verification is carried out in the following situations:
- when providing property for rent;
- selling or repurchasing assets owned by the company;
- transformation of a state or municipal enterprise;
- before the formation of annual reports;
- when appointing a new financially responsible person in the company;
- upon detection of damage to property or theft of property;
- after natural disasters or other emergencies;
- during the reorganization of the company;
- before the liquidation of the organization;
- in other situations as provided by law.
An inventory is mandatory before preparing annual reports. Such a process allows not only to take into account the requirements of the law, but also to prevent various errors or shortages in accounting papers. Typically, companies perform an audit annually before the end of a calendar year.
An inventory of fixed assets is carried out every three years. Each manager should know all the cases of mandatory inventory taking. In addition, he can independently appoint a check if there are doubts about the honesty of the work of certain hired specialists.
How is the process established?
Inventory necessarily involves taking into account the requirements contained in the guidelines. Numerous nuances are determined by the direct managers of companies. For this, the rules are fixed in the constituent documentation.
The director of the company can identify some important points:
- when you need to perform the process;
- how many times per year an inventory can be carried out;
- what time is the process carried out;
- how long does it last;
- which assets are certainly audited;
- who is a member or chairman of the inventory committee.
The answers to all these questions are fixed in the constituent documentation. An inventory is mandatory when changing financially responsible persons. Under such conditions, the new hired specialist can be sure that the shortcomings that arose under his predecessor will not be transferred to him in any way.
What is checked?
Inventory may be carried out in relation to different property, therefore, verification of cash, fixed assets, materials or other items is allocated. During the procedure, all assets and liabilities held by the company and its divisions are evaluated. The following elements are checked:
- fixed assets of the company used to conduct business;
- intangible assets of a company;
- various financial investments;
- goods and materials;
- unfinished production;
- money in accounts and at the box office;
- securities and BSO;
- Settlements with counterparties, customers, the Federal Tax Service, various funds and other debtors or creditors;
- reserves;
- assets and liabilities of the enterprise.
In which case is an inventory of materials necessary? Such a check is performed when there is a suspicion that the hired specialists in the company are abusing their powers, so theft or shortage is revealed.
The check is subject not only to property owned by the company, but also to the values that are located on off-balance accounts. The enterprise does not have ownership rights to them, but they are applied in the process of work on the basis of a lease or other agreements.
Process steps
An inventory of property necessarily involves the implementation of sequential actions. Therefore, the process is divided into stages:
- An order is issued by the head of the need for an inventory.
- An inventory commission is being created, and it should include specialists who are not interested in the results of the audit.
- Dates are determined during which the procedure will be performed.
- The property to be valued is selected.
- The materially responsible persons of the company give the employer receipts.
- Printed inventories of values in the company, created for each financially responsible person.
- A direct check is carried out, consisting in weighing, comparing the actual quantity with data from the documents, measuring, counting and other similar actions.
- The information from the inventory is compared with the information available in the accounting documents, which allows to identify all discrepancies
- Comparative statements are generated, with which you can identify the causes of the discrepancies.
- The results of the check are made out, for which a corresponding act is drawn up.
- If shortages and other problems are identified, then an investigation is carried out in the company, the purpose of which is to identify the culprits.
- Identified violators are brought to administrative or criminal liability depending on the characteristics of the violations.
It is necessary to complete the inventory before the direct preparation, signing and submission of annual reports to the Federal Tax Service. The inventory procedure necessarily ends with a special report.
Reporting Rules
Based on the results of the audit, a report is generated. It includes the following information:
- date of the inventory;
- data on members of the inventory commission;
- the period during which the procedure was performed;
- audited company property;
- identified problems and shortcomings;
- signatures of all reviewers.
Although an inventory is required before preparing annual reports, any company manager can start the process without good reason. For this, an appropriate order is issued, after which the employees of the enterprise are required to complete the procedure.
Responsibilities of the Inventory Commission
Inventory is required by law, therefore, each company must create a special body responsible for verification and accounting. It is called a liquidation commission. She has some responsibilities:
- the use of various preventive measures aimed at preserving the property of the enterprise;
- participation in various disputes relating to the storage or damage to property;
- control over the correctness of the compilation of various documents relating to the property of the company;
- conducting an inventory based on the order of the company management;
- preparation of a report on the results of the audit;
- conducting an investigation aimed at identifying the culprit of various violations and problems.
All these actions should be performed exclusively by company employees who are not interested in the results of the audit.
Who is included in the commission
When forming the commission, the following specialists are usually involved in the work:
- administrative staff;
- accounting department specialists;
- internal auditors;
- even independent experts are often involved;
- representatives of various posts available in the organization’s staff list.
If the company has a small amount of different property, then often the obligation to conduct an inventory is transferred to the audit commission, if it is available in the company.
If during the inspection it is revealed that even one member of the commission is absent, then the results of the procedure are invalid.
Responsibility for inventory abandonment
Some business owners deliberately refuse to conduct audits for various reasons. The legislation does not provide for liability for such a decision. But the FTS can fine the company if it turns out that there are inconsistencies or errors in the received financial statements.
Recommendations of specialists
When conducting an inventory in the company, it is advisable to use certain recommendations. These include the following:
- 10 days before the audit, the head issues an appropriate order, which is registered in the journal.
- It is allowed to form a commission not only permanent, but also one-time or working.
- If the organization uses a lot of goods and materials, then the decision on the need for a selective inventory is taken by the head based on the current situation in the company.
- All members of the commission should be engaged in verification, otherwise the results are easily recognized as invalid.
- During the process, financially responsible persons are involved.
- The company's management should provide the conditions for a quick and easy process.
- Often, verification takes a lot of time, and especially this applies to companies that use a large number of materials or ship and accept a lot of goods.
During the inventory, commission members must take into account the requirements of the law.
Dates
The head of the company determines how often the check will be performed. But at the same time certain recommendations are taken into account, therefore, an inventory is carried out at the warehouse at least once a year.
Stores should be inspected twice a year. Materials and goods are evaluated without fail before the preparation of annual reports. Inspection is usually carried out within three days, but sometimes the process is delayed for several weeks.
Conclusion
Inventory is a must for any company. It involves comparing the available materials and goods with the amount indicated in the documentation of the company. The process is carried out by a special commission.
There is no information in the legislation on liability for refusal to take an inventory, but if tax inspectors find errors and violations in the reporting, the company will have to pay significant fines.