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Inventory in logistics

What is an inventory?

What are the assets of a company? What is the amount of the debt? In an inventory, the assets and liabilities of a company are recorded at the end of an acquisition. A list of recorded items is documented in an inventory, which is part of the financial statements. What sounds so clear and simple here is not quite so easy, especially for retail companies and in the manufacturing sector. This is because it is precisely here that the proof of all assets, especially for tangible items, is somewhat more difficult. This is because while licenses, industrial property rights or receivables can be verified by means of the so-called book inventory, tangible assets must be determined by counting, weighing or measuring.

What inventory procedures are there?

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In order to achieve a detailed inventory of all existing stocks and assets, one can resort to different types of inventory.

The physical inventory
Physical inventory involves counting, measuring or weighing all things that are physically present – whether they are computers, printers, handheld terminals or pencils. If the items are small parts in large numbers, estimation is often allowed, especially if the effort to make an accurate determination would be too great and uneconomical.

The book inventory
This is about financial accounting. Everything that can be determined via receipts, bank statements, receipts, lists of balances or invoices – whether receivables, payables or credit balances at banks – is recorded by the book inventory.

The asset inventory
The company’s asset register is consulted for the asset inventory. It contains precise information on the value of plant and office equipment, the vehicle fleet or machinery.

Here, it is important that the respective item is precisely designated and that information such as acquisition or production costs, useful life, balance sheet value on the balance sheet date, annual depreciation and the date of addition and disposal are precisely documented.

The four inventory types

For your success

1. the closing date inventory
The classic type of a physical inventory, in which the inventory of assets and liabilities of a company is drawn up on a specific date, at the end of a reporting period.

2. the inventory sampling
In inventory sampling, random samples are drawn to obtain a representative sample of the inventory. From this, an extrapolation is made to the total stock. This type of inventory is performed using recognized mathematical-statistical methods such as mean value estimation.

3. the perpetual inventory
A perpetual inventory can be performed if a stock ledger and documentation of receipts and issues are available. However, it is necessary that a physical inventory is carried out at least once a year and that a comparison is made between the target stock in stock accounting and the actual stock.

4. the preliminary or subsequent inventory as of the balance sheet date
If it is not possible to carry out an inventory on the specified date, a pre- or post-balance inventory can be used. The basic requirement is that a physical inventory must be taken within three months before or two months after the balance sheet date.

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Nick Manke Sales Manager
René Koch Leiter Logistik Consulting

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