How to Perform Inventory Count Audit Procedures Easily in Retail Store?

How to Perform Inventory Count Audit Procedures Easily?

inventory Count Audit Procedures is an important task that needs to perform effectively. Every retail or grocery store must perform this activity effectively for accuracy or inventory. Today we will give you full information about the process, so you can easily perform the activity in your retail grocery store effectively.

This activity is divided into various parts, we will explain every part in detail. Ready all details carefully.

Planning and Scheduling for Inventory Count Audit Procedures

Planning and Preparation activities as mentioned below need to be performed for the inventory count.

Pre-Stock Take Process

100% stock take / Physical Inventory (PI) audit activity for each retail store. Store Manager or store owner & Stock Auditor/Asst. Stock Auditor will decide & schedule the process. Once the schedule is fixed we will perform the below pre-inventory count process.

  • Team to ensure that the Location Barcodes are printed and sent by the third-party vendor to the store at least 2 days prior to stock take.
  • Store Manager or Owner to ensure that the location barcodes received are affixed at the appropriate locations prior to stock take under the supervision of Asst. Stock Auditor.
  • Track of location barcodes needs to be maintained in the Location control sheet and handed over to the Asst. Stock Auditor along with the record of all damaged barcodes.

Pre-Inventory count Checklist for Inventory Count Audit Procedures

To run this activity successfully, we will follow the below checklist. If you follow this checklist that the count will be error-free. So read on for the quicker & easier process.

ZSC to send a reminder regarding the Pre stock take checklists at least 7 days prior to the stocktake date to the Store Owner.

  • Store Warehouse Manager to ensure that all line items of the Saleable Returnable Register, Saleable Non-Returnable Registers, Saleable Inward, and Outward registers are completed & properly checked.
  • Store Manager to ensure that all damaged/defective/returnable merchandise has been returned to the vendor/DC/store. If No, then the details of all such merchandise are to be accordingly recorded in the Returnable gate pass stock count sheet & Damaged/defective sheet. The same needs to be validated by Asst. Stock Auditor prior to the stocktake date.
  • All such damaged /defective/returnable merchandise needs to be segregated and kept aside.
  • Details of all the merchandise outwarded from the system but lying at the store to be entered in the Pending physical RTV/Outward stock count sheet. This merchandise is to be kept separately and must not be included in stock take.
  • Store Manager to ensure all pending deliveries/pending inward of electronics and furniture for which bills have been raised are declared in Sales Order Information.
  • Store Manager to ensure that all merchandise present at the store has a barcode (EAN’s) affixed to it at least 5 days prior to the stocktake.
  • All the stocks without barcodes are to be searched for appropriate barcodes. Those not found to be listed properly in Merchandise Without Barcode Sheet. This merchandise is to be kept separately in a clearly demarcated area. Relevant barcodes for the same are to be asked from the respective categories.
  • Also, a list of merchandise/brands having multiple barcodes presents on them to be made. The same is to be shared with the Stock Audit team prior to the start of the stocktake along with the information of the correct barcode to be scanned.
  • All those merchandises that are physically received but GRN is pending due to some reason, to be listed in the pending GRN stock count sheet (refer Annexure 10) & must be kept separately. These stocks are not to be considered for stock take.
  • Store Warehouse Manager to ensure that at least 3 days prior to the day of stock take, all the merchandise present in the store warehouse is properly arranged brand-wise / MC Wise. Brand-wise / MC Wise and day-wise cartons to be packed with Pre Count label carrying global count details pasted on them.
  • Further, in the case of cartons containing a single SKU, the barcode for the same is to be mentioned on the pre-count label for facilitating bulk scans. After posting the pre-count label warehouse manager give a declaration in the back stock declaration sheet. Stock Audit team to check the global count for at least 20% of such single SKU cartons randomly.
  • Store Manager to ensure that all manual cash memos have been updated in the system and details of the same have been updated in the Manual cash memo pending updation sheet.
  • Store Warehouse Manager to ensure that receiving of stocks except for Food Bazaar from DC/Vendors is stopped at least 1 day prior to the stocktake. The same must be informed to the category well in advance.
  • Receiving of stocks for Food Bazaar must be stopped by 4 pm one day prior to stock take day.
  • Exceptional deliveries if any received beyond the cut-offs mentioned above must not be rewarded in the system. Such merchandise is to be clearly demarcated and kept in a secure location in the store warehouse and recorded in Pending GRN Stock Count Sheet.
  • Store Warehouse Manager to ensure that all the merchandise physically received at the store must be inward in the system.
  • Store Manager to ensure that all SIS/OA merchandise is clearly segregated as these would not form part of stock take.
  • Store Manager to ensure that the store has colored stickers available to be used as a part of the stocktake activity. Each day color of stickers should change for identification of days.
  • The store team must prepare a daily Cut off & Count list sheet. and Store Manager to sign off the same every day.
  • The store Manager and the Stock auditor must also sign off documents for store readiness before the start of the stock-take process.

Team-wise Scheduling to Perform Inventory Count Audit Procedures

At least 3 days prior to stock take, the Store Manager to provide the details of staff in the Manpower Detail sheet to the Stock Auditor for preparing the team-wise schedule. Store Manager to also nominate a store supervisor for morning and night to supervise the stock take activity for
each day. Housekeeping staff should also be provided to assist the stocktake team.

Store Manager/Area Manager to ensure that, the proposed availability of manpower is consistent throughout the stocktake period for the store & that the manpower made available is trained.

Stock Take Team Briefing for accuracy & effectiveness

Store Manager / Franchise Manager or Asst. Store Manager to brief the stocktake team prior to the commencement of the stocktake. The briefing should include:-

  1. NO movement of stock between back store & floor during PI Activity
  2. Attendance check / Manpower Availability check
  3. Coloured sticker/marker distribution
  4. Query resolution

The Asst. Stock Auditor to also brief the team about the PI Process;-

  • Team-wise schedule distribution / Team formation
  • Distribution & Updation of Global count sheet
  • Distribution & Updation of the User control sheet
  • Distribution & Handling of HHT
  • Instruction for handling Short/Excess
  • Docking of scanned records at regular Intervals
  • Query Resolution

Global Count & HHT Distribution

A proper place designated by the Store Manager with charging facilities for HHTs to be provided to the stock takes a team. Stock Auditor / Asst. Stock Auditor to direct the store staff responsible for counting to the designated location and performing the count. The Asst. Stock Auditor to ensure that the location-wise global count sheets are collected back from team members.

  • The Asst. Stock Auditor to enter the locations and global counts for each user and hand over the HHTs to the user.
  • HHT users to update their User control sheet for locations to be scanned.
  • Upon distribution of the HHTs and Locations, Asst. Stock Auditor to obtain a sign-off from the scanning team on the User control sheet for asset & accessories allocation.
  • For all critical information/Troubleshooting regarding the use of HHT.

Scanning Process Important part of Inventory count

The user to strictly scan the location which has been assigned to him & not any other location.
For each location, the location barcode is to be scanned first & then the merchandise available on the Location. The scanning member to ensure that the merchandise found without barcode are segregated in a designated location & handed over to the Asst. Stock Auditor who will in turn handover it to store supervisor.

  • All the “Invalid” merchandise (which can be identified through the beep of HHT) is to be placed on the last shelf of that location. Also, the scanning staff needs to paste a sticker with the letter “I” followed by the location number on all such merchandise for identification of Invalids.
  • Once the scanning is complete & no shortage/excess is encountered, the staff must close the location and move to the next location to scan the merchandise. In case of shortage/excess, Asst. Stock Auditor to be called for help.
  • In case of shortage/excess, scanning members in the supervision of Asst. Stock Auditor to re-perform the global count to double-check the actual physical quantity.
  • If the physical stock is less than the global count then using the Admin password, a ‘Short Close’ to be performed in the HHT and the same should be noted on the User control sheet.
  • In case the physical stock is greater than the global count, an ‘Excess Close’ is to be performed in HHT and the same should be noted in the User control sheet.
  • Once the location is complete, a colored sticker should be put on the location barcode to indicate that the scanning for that location is complete.

Completion of the PI/Stock Take activity for the day

Once scanning for all the locations assigned gets completed, the scanning member must cross-check to ensure that each location scanned has been marked with the appropriate color sticker. Store supervisor to submit the merchandise without barcodes to the Store Manager for immediate resolution on completion of the day’s stock take process. Store Manager to ensure that the merchandise without barcode submitted to him/her gets resolved within 24 hrs.

Asst. Stock Auditor to generate a report (Valid Report) of all merchandise scheduled to be scanned on the subsequent days but had been erroneously scanned on the current day. This report is to be forwarded to the Store Manager. Stock Auditor to obtain a sign-off from the Store Manager on completion of the day’s PI activity.

Post Stock Take Process

The store staff must go to the physical location of the article and check if there is any merchandise with multiple barcodes. If found, the staff to get the correct EAN/Article of the merchandise and note it down against the wrong EAN. Store supervisor to send the detail to the stock analyst within 48 hrs. Inwards/Outwards at the store has to start after consultation with the ZSC.

Shrinkage and Variance Reporting

ZSC to finalize Shrinkage/Variance Report & and evaluate the audit report to prepare Inventory Audit Report. Shrinkage report and Inventory Audit report to be shared with Store Manager, Store Owner.


Is Inventory count an important activity for grocery stores?

Yes, it’s a very important part of a grocery store.

How much accuracy we can expect in physical count activity?

Depending upon the volume up to 95% accuracy is expected in the activity.


Today we have given full information about Inventory Count Audit Procedures. If you follow the above process then accuracy is expected up to 95%. If still, you have any query do comment below.

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