Conducting scheduled and unscheduled inventory counting shares some common features but also has significant differences. The asset verification procedure is essential for almost all companies, as it helps detect violations in a timely manner — in many cases preventing bankruptcy.
What Is Inventory Counting
Inventory counting is a procedure aimed at physically verifying the condition and availability of tangible assets that make up a company’s balance sheet. The obtained data is compared with the records documented in the accounting system.
Objectives of inventory counting:
- To control the accuracy of accounting records;
- To check the condition of goods;
- To identify unrecorded assets;
- To count available property;
- To write off equipment, furniture, or vehicles that are beyond repair.
Inventory counting helps prevent theft in enterprises and evaluate employee performance. It is divided into several types and, in terms of frequency, can be either scheduled or unscheduled.
Features of Scheduled and Unscheduled Inventory Counting
The timeframe for scheduled asset checks is regulated by Federal Law No. 402-FZ. This procedure is usually planned for the last three months of the year and included in the accounting report. Each company also conducts scheduled inventory according to a set timeline. This schedule is prepared and approved by management at the beginning of the year, and the staff is informed in advance about the inventory.
Unscheduled inventory counting is conducted without a predefined schedule. It is carried out after fires, sewage leaks, flooding, or other emergencies. It may also be initiated if the company’s management or department heads have information about theft or missing material assets.
Standard procedure for scheduled inventory:
- The head of the company issues an order to conduct the inspection. The order lists the composition of the commission, which typically includes administrative staff, experts, audit representatives, and materially responsible personnel.
- Inventory counting takes place. Commission members count goods, raw materials, and other assets. If necessary, they weigh or measure them. The results are recorded in official forms (such as INV-1, INV-3, etc., depending on the type of asset). These forms list assets by groups, specifying type, grade, and article number.
- A reconciliation is performed. The asset data obtained during the inventory is compared with accounting documents. A separate act is prepared for assets that must be written off.
- Results are finalized. Based on the findings, the company’s head issues an order for adjustments in accounting records and recovery of damages from those at fault.
If a large volume of scheduled checks is expected, multiple commission groups are formed, each responsible for a specific area. This streamlines the process and makes it more efficient. Scheduled inventories must be completed before the submission of the annual financial report; otherwise, the tax authority may receive incorrect data. By law, inventory counting must be conducted in the presence of materially responsible persons. If they are absent during the inspection, it may be difficult to recover damages.
The key difference with unscheduled inventory is that its timing is not set in advance. The company’s head can initiate it at any time by issuing an order and immediately launching the process. Unscheduled inventory may be conducted at any frequency and can be either full or selective. A full inventory involves checking all assets, while a selective one focuses on a specific set of material assets. Unscheduled inventory dates can be shifted, unlike scheduled ones, which are strictly tied to the financial reporting period. Only commission members are notified of the inspection date.
If discrepancies are found during an unscheduled inventory, the commission must determine the causes. Based on the inspection results, decisions may be made to eliminate consequences, conduct an additional audit, or develop measures for asset recovery. If theft is identified, the documentation is forwarded to the prosecutor’s office, and investigative authorities must determine the guilty parties and impose appropriate legal penalties.
Both scheduled and unscheduled inventories are overseen by the company’s or department’s management. The employee responsible for the process must ensure adherence to deadlines, timely reporting, and updates to records on tangible and intangible assets. Inventory counting is necessary for companies in any field of business, but its scheduling and execution must comply with legal requirements.
