The annual inventory of assets, liabilities, and equity is usually performed at the end of the financial year, and engages the following steps in the process:
- appoints, by written decision, the inventory committee.
- indicates the procedures for carrying out the inventory, the inventory method used, the locations, and the timetable for operating the inventory.
- approves the formalized inventory procedures, which are further shared with the inventory committee
- ensures the appropriate working conditions for the inventory committee
- decides on the final inventory outcome, after obtaining the conclusions from the finance and legal departments regarding the proposed resolution.
The inventory committee
- display the inventory schedule and timetable in a visible place.
- identify all the locations where the goods need to be counted
- check all measuring or weighing instruments and devices if they are in good working order
- take from the inventory manager a written statement, before starting of the inventory procedure, related to the organization of his/her inventory administration
- seal the storage spaces, in the presence of the inventory manager, whenever the inventory operations are interrupted, and the inventory manager is absent.
- cross-out, date, and sign the warehouse slips, after the last inventory operation was performed
- verify the cash from the petty cash register and determine the cash collections in that day
- ensure that the inventory lists are signed on each page by the inventory committee president and their members, the inventory manager, as well as the technical experts required by the committee president to participate in the inventory.
- ensure that the inventory manager mentions on the last page of the inventory lists whether all assets and monetary values under his administration were counted and recorded on these lists in his presence, as well as his/her objections, if applicable.
- present to the company’s administrator the conclusions and recommendations within seven working days from the ending date of the inventory operations.