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TPAMM00205 - Inventory Record Accuracy (inverted)
Requirements: Stock situation has to be represented correctly in the system; all stock movements have to be recorded in the system. All stock items have to be counted at least once per year. Results have to be entered, recounts requested when necessary and differences posted promptly in the system. It is recommended to minimize the workload by using cycle counting.
Definition: Inventory Record Accuracy = Number of Inventory Document Line Items without Adjustments / Total Number of Inventory Document Line Items
Total Number of Inventory Document Line Items definition: per plant:
Material type: ERSA only
Inventory document line item is Posted (Adjusted)
Posting date within the last 52 weeks
Number of Inventory Document Line Items posted without Adjustments definition: Number of the above fulfilling the following criterion:
Adjustment quantity is zero
Note that all differences, even zeros, have to be posted in the same period as the stock count.
Impact
Unsatisfactory internal audit results
Unavailability of spare parts in case of plant breakdown
Relevant Best Practices
Principles of Tech Store Management
Nestlé Accounting Standards
Audit Manual - E2E Asset & Maintenance Management - Section: Technical Store
Risk A - Internal Controls
Risk B - Stock Management
NSAT 08-1.11 Stock counts and adjustments
Various local legislation acts
Corrective Actions
Follow Principles of Tech Store Management, Nestlé Accounting Standards and local legislation requirements
Ensure that all stock movements: goods receipts, issues, transfers, etc., are recorded in the system as soon as possible. Ensure that a stock management procedure, covering all possible cases, including goods issues when store keeper is not available, is developed, trained out and strictly followed.
Use AMM scanning solution for technical stores in order to reduce typing and other errors
Use Cycle Counting in order to level workload, minimize counting effort as well as to differentiate counting frequency