Physical Inventory SOP - 22 Aug 2024 PDF

SOP : Physical Inventory For...

SOP : Physical Inventory Format No.: RW-P1-05-17 Objective:- To define the process of conducting Physical inventory and reconcilliation Revision: 04 Scope:- All Raw material, BOP items, WIP, FG, Packing, Toolings, Maintenance spares and Consumable items Revision date: 22.08.2024 Process Owner:- HOD Finance Steps All Departments Production Finance Plant Head/ Mfg. Head External Auditors CFO Frequency Check point Format Date of Physical At Least one week before inventory Inventory to be (RM/WIP/Finished good monthly and 1 circulated Mail / circular all every 3 months) End of Mar, Jun, Sep,Dec) 2.1 Minimize inventory as far as possible Action to be taken as 2.2 Clear rejections and scrap material per pre-physical 2.3 Critically control material from supplier Physical Inventory actions checklist 2 Inventory checklist 2.4 Rework should be clear Annexture 01 2.5 Give training to al the members involved in inventory 2.6 Check and clear any discrepancy in SAP Tags with numbers to 3.1 No interchange of the tag in interdepartment Physical Verification Docket (Inventory 3 be Circulated 3.2 store team will arrange the tags for Finance. Tags) 3.3 HOD should sign the tag. 1. Physical Inventory of material 4.1 Identify each and every component, Raw material, BOP, WIP, and put Tags by Team Rejection, scrap, finish goods, spares Meticulously 2. Departement HOD to do 4.2 Identify with Tag and creat a list of all the Tags Random Audit Sampling of 20% 4.3 Check that no Tag is missing of the item nos & Ensure Audit 4.4 HODs enter the data into the inventory system. SOP complaince Physical Verification Docket (Inventory 4 4.5 HODs compare counting data to data in the system. 3. CFT to do random 5% of the Tags) 4.6 CFT (Plant EXCO Team) item nos 4.7 Approval From CFO for Adjustment of physical Dross >30% against the system generated. 4.8 Approval From CFO for Adjustment of physical Chips >3% against the system generated. 1. Department Hod 5.1 HODs assign staff to investigate against discrepancies found countercheck physical qty vs the 5.2 Staff recount OR give reason for the discrepancies 5 SAP qty. 5.3 Once HODs validate the count data, they send it to the accounting department. 8.1 External auditors to be invited to verify the Inventory Verification of 8.2 If any Non conformity found during external audit, Re inventory to be Inventory conducted 8 8.3 There should be no movement of goods take place. For that period there shall be no production Meeting to decide / Finalize actions of discrepancy report 8.4 IT dept. has to block all SAP ID except account until all adjustment take place 9.1 List of Tag and Item wise Inventory in excel format to be submitted 9 Report submission to Finance to Finance with in one hour after close the sap i.e. by 10 AM Physical inventory Verification report Review Implementation Compile Inventory Review Implementation 10 10.1 Finance to compile Inventory reports received from all the areas Report Prepare discrepancy report and circulate 11.1 Any gap between SAP and physical inventory to be compiled and 11 Discrepancy report circulated to concern for submission of counter measures Review discrepancy report and submit clarification and countermeasures 12.2 Analyze all the discrepancies and identify causes for the same 12.3 Identify counter measures with responsibility and targets and 12 Discrepancy report submit to finance Meeting to decide / Finalize actions of discrepancy report 13.2 Finance and Plant head to review the countermeasure submitted 13 and discuss in a meeting 14 Review Implementation 14.1 Monitor implementation and submit closer report to finance Closure report Take CFO Approval 15.1 CFO Approval is mandatory for Adjust the diffrence in the sap(For 15 for Adjust the Stock Dross>30% & Chips>3%) Mail / circular diffrence in SAP 15.2 Physical adjustment of dross and chips to be done atleast monthly Re-Verfy the adjustment submit vs Correction done in sap by Finance team & confirm 16 Mail / circular within 24 Hours