Why take a stock inventory? Is this a legal obligation?

All companies that own finished products and raw materials are required to carry out their physical inventory once a year according to the accounting requirements defined by the Commercial Code. The identification of these elements is essential in accounting to establish the annual accounts of the company.

It allows you to know what a business owns and to know the value of the products or goods it owns. The inventory of the stock must be carried out with care and precision because the tax administration has the possibility of contesting it since it has an impact on the result of a company and therefore on the amount of taxes that it must pay.

What does the stock inventory consist of?

The inventory of the stock of a company consists in recording the goods, the finished products or not, the raw materials and the services in progress, which it holds on a given date, most often on December 31, but in all case at the time of the closing of its financial year. Fixed assets, capital goods or materials not intended for sale should not be taken into account in the POS system with inventory management.

The latter makes it possible to assess the active elements (their quantity and their value excluding tax) that these stocks constitute, that is to say the elements intended to be sold or consumed, and to list the list of products sold and purchased. The purpose of the stock inventory is also to identify any management errors (discrepancies between the theoretical quantities and the actual quantities held).

The different types of stock inventory

If inventory is a legal obligation for a business, it has a choice of how to account for it. However, the latter should always take the form of a physical count performed by people, most often company employees, or by people recruited specifically for inventory for larger companies. Concretely, the people in charge of this inventory have counting sheets on which they write the reference of the products in stock and their number.

Then, the valued stocks are valued according to calculations specific to cost accounting. When taking stock inventory at POS system with inventory management, the activity of the company is most often slowed down to carry out this legal obligation. There are different types of inventory.

The annual inventory

The purpose of the annual inventory is to count all products present in a business or delivered to customers until they have been invoiced. For the products manufactured by a company, this census is made on the basis of their number and their cost price, that is to say the cost of raw materials to which we add the cost of production, labor and loads. For products purchased by the company, it is the purchase price excluding tax less any discounts that is recorded in the stock inventory.

The permanent inventory

Most often practiced by companies that do not have a lot of stock, the permanent inventory consists of recording the products present in the company as they leave, or enter, the stock.

The rotating inventory

Revolving inventory refers to the posting of stock on a periodic basis. It has the advantage for a company to provide a regular view on the state of its stocks and to act quickly if these are too large, or, on the contrary, if goods are out of stock.


For more details, please visit: alfacybernetics.com


Check Also

best PPC advertising

Some of the best PPC advertising tricks for a better click-through ratio

Good content on your website and a compelling landing page are a good thing that …