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Use these seven controls to protect your inventory while it moves through the production process

by , 31 July 2014
Your inventory is at its most vulnerable to fraud when it moves through your production process. This is when there are fewer people watching your stock inventory at this time. This means it's easier for employees to pocket stock items as it moves through the process.

You must have internal control to protect every step of your goods life, from the moment you buy the raw materials to the day they land on store shelves. But these controls are especially important during the production process.

To help you control and keep track of your inventory stock, use these seven controls...

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Seven controls that'll protect your inventory during the production process

 
1. Your employees must sign for the goods or raw materials when they arrive at your warehouse.
 
2. Your employees must sign them in as raw materials when they arrive at the warehouse.
 
3. When your employees need more raw materials during production, the supervisor must sign the materials out of 'Raw Material Storage' and into 'Production'.
 
4. Your 'Raw Material Storage' and 'Production' are internal inventory tracking documents (Inventory Movement Slips).
 
5. Your employees must prepare on Inventory Movement Slip (IMS) that shows the inventory they need and how much.
 
6. Your employees that deal with Raw Material Storage and Production must sign the IMS to prove where the goods went and to whom.
 
7. You need a new IMS each time the inventory moves from one department to another. For example, from storage to production and then from production to cleaning. Each time the inventory moves, both departments must sign the IMS.
 
These inventory controller measures will force employees to take responsibility for the inventory they're working with. It also isolates where the inventory went missing during the production process.
 
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