Inventory Audit Checklist

No goods should move in or out of the warehouse during the 24-hour freeze window. Communicate this to all receiving, dispatch, and purchasing teams. Any GRNs or dispatch orders should be held until after the count is complete.

Every counting team must have two members: one to count and one to record. Teams should not count items they are responsible for managing day-to-day. Segregation of duties prevents bias and catches errors.

Export the current stock position from your ERP or Tally at the exact freeze time. Note the timestamp. This becomes your "book count" — the baseline against which physical count is reconciled. Do not update the system during the count.

Prepare location-based count sheets (not item-based). A count sheet should list the bins and shelves in a section, with blank spaces for counters to write in what they find. Do not pre-populate with expected quantities — this creates confirmation bias.

Ensure all scanners, tablets, or mobile devices are charged and tested before the count begins. Download and sync the inventory app if used. Have spare batteries and paper count sheets as backup.

Budget your time realistically. A careful, accurate count takes about 4 hours for every 500 SKUs with two-person teams. For an operation with 3,000 SKUs, plan for a full day. Rushing produces inaccurate counts that require re-counts — wasting more time than the original estimate would have saved.

Work through one location at a time. Count everything physically present in a bin or on a shelf before moving to the next one. Mark each location as "counted" on your floor plan when done. This prevents both double-counting and skipped locations.

Use barcode scanners for efficiency and accuracy. For items without barcodes, note the item code, description, and unit of measure manually. Any item without an identifiable code should be flagged for labelling — not ignored.

Damaged, expired, or non-sellable stock must be counted in a separate column, not lumped with saleable stock. This matters for insurance claims, GST credit reversal, and accurate gross margin reporting.

Any goods that were dispatched before the freeze but not yet received by the customer, or received from a supplier but not yet processed, should be tracked in a separate "in-transit" register. These items affect your book count but should not appear in the physical count.

Any item with a unit value above ₹10,000 (or your defined threshold) must be counted by two independent teams, at different times, with counts compared before moving on. A discrepancy at this stage triggers an immediate third count.

Collect all unlabelled items in a designated area after counting. Re-label them before they return to storage. Unlabelled items in external storage facilities create handover disputes — every item going to SafeStorage must carry a clear label.

Enter physical count results into a reconciliation spreadsheet alongside the system (book) count. Calculate the variance for each SKU in both units and value. Sort by value variance descending to prioritise investigation effort.

A 1% variance by value is the standard materiality threshold. For variances above this: re-count the item, check for mis-stocking (item placed in wrong bin), and interview the team member responsible for that location. Document all findings.

Review all Goods Receipt Notes (GRNs) issued in the 7 days before the freeze. Confirm these goods are present in the physical count. A common source of variance is goods received but not yet entered into the system.

Review all dispatch notes and e-way bills issued in the 7 days before the freeze. Goods dispatched but not yet deducted from the system will show as a "surplus" in your physical count. These must be cleared before closing the audit.

Use the physical count as an opportunity to identify slow-moving and obsolete stock. Any item untouched for 12 months should be reviewed for write-off, sale as surplus, or transfer to long-term archive storage at reduced cost.

Once the reconciliation is signed off by an authorised approver (finance head or CFO), update your ERP or Tally with the audited figures. Document the adjustment entries for GST and accounting purposes. Never update before sign-off.

Photograph all goods in their current condition before they are loaded. Use a high-resolution camera or smartphone with flash. Include the item label in the frame. Date and time stamps from your phone's camera are your insurance evidence.

Every carton, pallet, piece of furniture, or equipment unit going into storage must carry a unique identifier: your internal item code or a sequentially numbered label. Never send unlabelled goods to an external facility — retrieval and reconciliation become nearly impossible.

Note L×W×H and approximate weight for each carton or furniture piece. This data is used for billing verification, insurance valuation, and space planning in the storage facility. Disputes over billing often trace back to undocumented dimensions.

The handover manifest is the formal record of everything transferred. It must include: item code, description, quantity, condition, dimensions, declared value, and photograph reference number. Both parties sign and retain a copy. SafeStorage provides a photographic handover manifest for every pickup — ensure your internal manifest matches theirs.

The storage provider's representative must sign your handover manifest (and you sign theirs) at the moment of pickup — not later, not via email confirmation. A signed manifest is the only document that definitively establishes what was handed over and in what condition.

Store the signed handover manifest, condition photographs, and the storage agreement in your document management system for a minimum of 7 years (GST audit window) or longer if your industry requires it. These documents are required if you claim storage costs as a business expense.

Retrieve the original signed handover manifest and check every item number, description, and quantity against what has been delivered. Do this physically, in front of the delivery team, before signing anything.

Open cartons, inspect furniture surfaces, and power on electronic equipment before accepting delivery. Compare current condition against pre-storage photographs. Note any damage on the delivery receipt before signing — do not sign and raise a claim later without documented evidence.

If any items are missing or damaged, report to the storage provider in writing within 24 hours of delivery. Include photographs, the manifest reference, and a description of the discrepancy. Most storage agreements have a window for damage reporting — missing this window can void your claim.

Once retrieval is confirmed and accepted, update your ERP or Tally to reflect the goods re-entering your premises. Close the storage transaction record. Archive the handover manifest and delivery receipt together in your document management system.