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When it comes to your company's inventory, internal controls are a must!

by , 31 July 2014
When it comes your company's manufacturing process, your inventory is like gold. Whether it's your raw stock or your finished goods, it's an essential part of your production process.

The problem with your inventory, especially your finished stock, is it's extremely vulnerable to fraud.

The reason? It can easily disappear and reappear as extra cash in someone's pocket. What I mean is your staff could steal your inventory and sell it. This will completely throw off your inventory costs and your bottom line.

This is why internal controls are a must and we're going to show you how to implement them...

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Here are the internal controls you should use to prevent inventory fraud

The best way to protect your company against inventory fraud is to stop it from happening.  This means you need to improve the controls around the movement of your inventory stock. 
Whether your inventory is still on your premises or you're moving it to your storage warehouse, it's still vulnerable. 
This is why you need to keep track of who handles your stock and where. 
Here are some ways you can do just that.

Keep track of who handles your inventory stock and where

To keep track of which of your employees handles your inventory, you can use:
- Signed register sheets
Your employees must sign the register anytime they take possession of your inventory. This helps you find where the holes in the chains are. If your employee signs for the inventory stock and half of it goes missing, he's responsible. This will also make employees less likely to pinch stock from you.
- Security cameras
You must keep cameras anywhere where you store your inventory. This way you can keep an eye out and catch any thieving employees.
With these two internal control methods you can protect your stock inventory and your company's bottom line. Just be sure to do an inventory valuation on your stock regularly to ensure nothing went missing while you weren't looking.

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