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Stock up Knowledge on Stock Verification

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The physical counting of stock is known as stock verification. When counting is not an option, measuring or weighing is used. The outcomes of such physical inspections are meticulously documented. a procedure for ensuring the accuracy and integrity of inventory records stored in a company's database. This stock verification entails physically verifying or counting stock items in order to compare the actual count to the recorded count in the database.

What is stock verification?

The process of ensuring that all goods in a warehouse are present, accounted for, and correctly valued is known as stock verification. The stock verification sheet is the method used to verify the stocks. Stock verification is the process of ensuring that the material meets the details, specifications, and balance quantity specified in the material register/record. In other words, "Stock Verification" is the process of comparing the current book balance to the actual physical balance of the material.

Stock Verification's Goals

Physical stock verification is the procedure of determining the correctness of goods in the store on a given date (e.g., in terms of quality and quantity). The emphasis in physical stock verification is on quantity verification via counting or weighing (or any other suitable method).

The following are the primary goals of the stock verification of materials in stores:

  • To check the accuracy of the stock records
  • To check the accuracy of the values entered in the stock record
  • To detect any discrepancies
  • Identifying flaws and suggesting improvements
  • To protect against employee misbehaviour
  • It reduces theft and fraudulent practices.
  • It ensures that documents are accurate and useful.
  • It results in the reconciliation of stock records and documents.
  • It identifies areas for more stringent document control and supports the balance sheet stock figures. The materials audit department is in charge of stock verification. 


The two main types of stock verification are:

  • Annual stock verification
  • Continuous stock verification (also referred to as periodic stock verification)

Annual Stock Verification

Periodic stock verification is another name for annual stock verification. This method verifies (audits) the entire stock at the end of a given period. In most cases, this marks the end of the fiscal year. Because the stock must be included in the balance sheet, a stock audit is also required at this time. Stock verification typically takes several days, during which time storehouse operations are halted.

The Benefits of Annual Stock Verification

Annual stock verification has a number of advantages which are listed below

  • Simplicity
  • Effectiveness in terms of convenience
  • Simple balance-sheet valuation 
  • No additional staff required

Continuous Stock Verification (also referred to as periodic stock verification)

Perpetual store verification is another name for continuous stock verification. This type of stock verification occurs on a continuous basis throughout the year. Each year, a verification programme is developed at the start of the year, and the verification process is carried out in accordance with the programme. Every item in the programme is verified at least once a year, according to the program's structure. Other items are checked more frequently, especially those that are valuable or in high demand. The programme is kept strictly private. It is also necessary to keep detailed, complete, and up-to-date store records. The failure of records usually leads to the failure of the verification programme as a whole.

The Benefits of Continous Stock Verification

Continuous stock verification has a number of advantages which are listed below

  • The first advantage of continuous stock verification is that the storehouse does not have to be shut down.
  • Furthermore, no additional personnel are required to conduct and complete the stock verification.
  • Another advantage is that discrepancies are quickly identified and corrective measures are implemented. Such discrepancies are not identified until up to 12 months after annual stock verification.
  • Continuous stock verification also benefits from the fact that permanent staff are assigned to perform the verification work all year.
  • Finally, large warehouses can use the method effectively and profitably. Continuous stock verification is more expensive than annual stock verification for small warehouses.
  • A medium-sized warehouse, on the other hand, is likely to benefit from continuous stock verification.


The procedure for stock verification is in a prescribed manner. The steps must be followed one by one. Listed below is the procedure for stock verification

  • Create a verification programme.
  • Obtain permission from the appropriate authorities.
  • Form a verification team.

It should be noted that in continuous stock verification, the staff is permanent, and the verification team is not appointed. However, the following personnel are appointed to the verification team under annual stock verification:

  • Technical employee
  • Accounting or auditing staff member
  • An employee from the storage department


  • Give the verifiers a timetable and a stock-taking sheet that is serialised and dated.
  • Using the available documents, record notes and other details on the stock-taking sheet.
  • Physically inspect and verify inventory.
  • Make a note of any discrepancies.
  • Determine the worth of the stock.
  • Delivering the required certificates, reports, and recommendations.

Inventory Sheet or Stock Checking Sheet

A stock-taking sheet is a printed document that the verification team is given. It makes stock verification simple, systematic, and error-free. Following the completion of the process, the findings are summarised and reports are prepared. The stock-taking sheet is also used to calculate the total value of the stock.

The stock-taking sheet proforma is as follows:

1. Quantity taken by.....................................

2. Amount Examined by......................

3. Costs Inserted by.....................

4. Expansion and Improvements Added by.................

5. Expansion and Improvements ................ has reviewed it.

6. Stock Values Certified by..............................

7. Examined by......................................................................

After stock verification is completed, a stock valuation sheet is created to consolidate all stock-taking sheets.

Frequently Asked Questions

What is the distinction between a stock-taking and a stock valuation sheet?

A stock-taking sheet specifies all items purchased during a specific time period. The proforma includes information such as the name of the supplier, the quantity purchased, the price paid per unit, and so on. A stock valuation sheet compiles all of the results from individual stock-taking sheets and computes the total value of all items.

What should the foundation for stock verification be?

A physical stock count should be performed on a regular basis, typically monthly or quarterly. Stores' physical quantities should be compared to the number of items recorded in the store ledger and order records. A thorough review should also include comparing current stock to the previous year's valuation to ensure that there are no significant differences.

What should we look for during physical verification?

The entire inventory counting process should take place in a well-lit, clean environment free of dust and other contaminants. All items should be counted individually, and the total should match data from records such as invoices, packing slips, and delivery dockets.

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