Do you want regular Stock Audits ? Inventory Management Outsourcing ?
Inventory is often one of the largest and most sensitive assets in any manufacturing, trading, or distribution business. Yet in many organisations, management relies on book stock, ERP stock, or stores records without sufficient confidence that the physical quantity on the floor actually matches what appears in the system.
When this gap remains unchecked, it leads to wrong financial statements, poor production planning, delayed dispatches, hidden shortages, excess purchases, blocked working capital, internal control weakness, and difficult discussions with banks, auditors, and management teams.
A disciplined stock audit and inventory management review helps management move from assumption to fact, from guesswork to control, and from reactive correction to preventive systems.
At MLG Associates, we help businesses strengthen their inventory control through stock audit, inventory verification support, process review, and practical outsourcing assistance. Our work is not limited to a desktop review of reports. We believe that stock control improves only when the physical reality of the factory, warehouse, store, WIP area, dispatch zone, scrap yard, and records is studied together. This is why our approach combines physical verification, document trail checking, transaction review, system understanding, exception reporting, and management discussion. The purpose is not only to identify shortages or excesses, but to understand why they happen and how the business can prevent recurrence.
https://mlgassociates.in/youtube-stock-audits-how-we-the-cas-can-help-the-industry
What we at MLGA do in this regard ?
At MLGA, we support clients in stock audit and inventory management outsourcing through a structured, practical, and management-focused method. We study the nature of stock first: raw material, packing material, bought-out items, consumables, work-in-progress, finished goods, scrap, slow moving stock, customer-returned stock, and material lying with job workers. Every category carries a different risk, and therefore requires a different verification logic. We also study whether the client is a manufacturing unit, trader, project company, warehouse-driven business, or a multi-location operation, because inventory controls differ sharply across industries.
Our team helps in physical stock taking, surprise stock verification, periodic cycle count design, year-end inventory verification, bank stock statement reliability review, reconciliation of physical stock with ERP or books, and review of inward-outward discipline. We examine the movement trail of stock through gate entry, GRN/MRR, issue to production, WIP movement, production receipts, QC decisions, sales dispatches, returns, rejections, scrap generation, and inter-location transfers. Where needed, we also review whether back-dated entries, unauthorised corrections, uncontrolled opening balances, or weak maker-checker discipline are affecting stock reliability.
We also help in ERP Implementation, Directly and Indirectly. Some of the best ERP softwares in this regard are “Finsys ERP” etc.
We also assist management in inventory process strengthening. This includes suggesting bin discipline, coding discipline, tagging, count-sheet design, blind counting, maker-checker approval, transaction freeze during count, variance classification, approval matrix for stock adjustments, and periodic management review formats. In businesses where the internal stores or accounts team is over-stretched, our inventory management outsourcing support can bring a neutral and disciplined layer of supervision. The objective is to make physical stock, ERP stock, and financial stock speak the same language.
Why this is a successful idea ?
Inventory audit and inventory management outsourcing is a successful idea because stock problems usually do not remain only in the stores department. They affect purchasing, production, planning, costing, sales promises, working capital, bank drawing power, GST issues, and the credibility of the balance sheet. A business may appear profitable on paper while actually carrying hidden losses in shortages, obsolescence, scrap leakages, wrong BOM consumption, or unrecorded stock movement. Therefore, when management invests in regular stock audit, it is not spending on checking alone; it is protecting margin, cash flow, and control.
A formal stock audit SOP improves accuracy, accountability, compliance, and profitability. Finsys material on physical verification highlights that without a structured process, stock checking becomes chaotic, while a proper SOP reduces counting errors, identifies responsibility for variances, supports statutory audits, and reduces hidden losses due to theft, damage, or obsolescence. The same practical logic applies when MLGA performs or supports such assignments on-site: discipline before counting, neutrality during counting, and structured action after counting.[facebook = https://www.facebook.com/mlgassociatesCA/ ]
This model succeeds especially well in growing organisations where management has expanded sales and production faster than internal control systems. In such businesses, the team is often hardworking but not process-driven enough, which creates negative stock, delayed entries, unreported variances, and weak traceability. Finsys documentation also points out common reasons for wrong or negative stock such as changing opening stock, back-dated edits, wrong counting at receipt or issue stage, and uncontrolled corrections later. Independent physical verification and regular review help expose these weaknesses early, before they become habitual or financially material.
How our team goes physically ? and does this at your factory ?
Our this part of the work is field-oriented. When required, the MLGA team physically visits the factory, warehouse, godown, or store locations and conducts a ground-level stock verification exercise in coordination with management.
We do visits as far as in Assam, in MP, in Punjab, in Maharashtra etc during course of such assignments.
Before the visit, we define the scope: complete stock, selective stock, high-value items, disputed items, slow-moving items, work-in-progress, or bank drawing power sensitive inventory. We also decide whether the exercise will be surprise based, period-end based, or part of a recurring monthly or quarterly discipline.
On-site, the process begins with a preliminary walkthrough. The team understands the layout, material flow, coding method, storage locations, rack numbering, open areas, scrap zones, rejected material area, quarantine stock, job work inward and outward records, and the practicality of physical count. We verify whether items are properly labelled, whether mixed stock is lying in one location, whether partially used lots are identifiable, and whether non-moving or damaged stock is still being shown at full value. This preliminary observation is important because stock problems usually reveal themselves through housekeeping and process gaps even before the counting starts.
After that, we proceed with count planning and execution. Wherever possible, we prefer disciplined count sheets, blind counting logic, area allocation, supervision, and reconciliation control. The count may be done through manual sheets, scanner-supported methods, barcode-assisted methods, Excel upload support, or client ERP-assisted capture, depending on the maturity of the client system. Finsys content on physical verification specifically highlights methods such as Excel upload, Bluetooth scanner, gun scanner, QR code support, blind count, and ERP-based variance analysis; these methods improve speed, traceability, and reliability when implemented properly.
The next stage is reconciliation and root-cause review. Variances are not merely listed; they are analysed. If physical stock is higher than system stock, we examine whether inward entries were missed, production receipts were delayed, or returns were lying unbooked. If physical stock is lower than system stock, we examine issue controls, unbooked consumption, scrap leakage, wrong unit of measure, BOM inaccuracies, gate movement issues, or even possible misuse. The aim is to convert a stock-taking event into a management learning exercise.
Finally, we present our observations in a practical manner. Management normally needs more than a variance sheet; it needs clarity on risk, reason, priority, and action. Therefore, our reporting can include category-wise variance, process observations, control weaknesses, immediate corrective action points, and preventive recommendations for future periods. Where required, we also help design periodic review systems so that physical verification becomes a habit of control, not a once-a-year ritual.
Why companies choose MLGA
Companies choose MLGA for this work because stock audit requires both financial understanding and operational common sense. It is not enough to count cartons, bags, reels, sheets, coils, drums, or components; one must also understand valuation impact, process discipline, ERP behaviour, and internal control consequences. A strong stock audit team must be able to talk to promoters, plant heads, stores teams, accountants, and auditors in one continuous thread. That is where our practical blend of audit orientation, systems thinking, and business-process understanding adds value.
We also appreciate that every client is different. Some need a one-time stock verification before finalisation of accounts. Some need regular outsourcing support because their internal team is not able to maintain inventory discipline. Some need support before bank audit or drawing power certification. Some need help after repeated negative stock situations, unexplained shortages, or mismatches between ERP and ground reality. In all such cases, the core principle remains the same: build confidence in stock numbers, improve control at source, and help management take decisions based on facts.
If your business depends heavily on inventory, then stock audit is not an optional compliance burden. It is a management tool, a profitability tool, and a credibility tool. A reliable inventory system improves planning, reduces leakage, supports better working capital management, and makes your balance sheet stronger. At MLG Associates, we believe that when inventory control becomes disciplined, the entire business becomes calmer, faster, and more profitable.
YouTube links
Here are 5 readable YouTube links from our youtube channel related to physical stock taking / physical verification / stock audit:
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Stock Audit, Physical Verification of Stock in a Factory – SOP, best methods
https://www.youtube.com/watch?v=UaTKE1qAPz8
Summary: This video explains a structured SOP for factory stock audit and physical verification. It covers pre-audit preparation, housekeeping, freezing transactions, count tagging, blind count method, and ERP-based variance reconciliation. It also explains how positive and negative variances should be interpreted, and why disciplined stock taking improves audit quality, internal control, and profitability for manufacturing businesses.
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Physical Verification of stock – 3 methods, Excel upload, Bluetooth scanner, Gun Scanner + QR codes
https://www.youtube.com/watch?v=5cQ-hPOZmOs
Summary: This video focuses on practical methods of physical stock verification using technology-enabled approaches. It refers to stock taking through Excel upload, Bluetooth scanner, gun scanner, and QR code-based methods. The usefulness of the video lies in showing how physical verification can move from slow manual counting to faster, traceable, and better-controlled counting supported by digital capture.[mlgassociates]
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40 second– Physical verification of stock using Barcode scanner Corrugation – Finsys ERP
https://www.youtube.com/shorts/iJnxTL0VjgY
Summary: This short video gives a quick visual snapshot of barcode-based physical stock verification in a corrugation environment. It is useful as a practical illustration of how a scanner-led process can speed up stock taking and reduce manual entry. For a webpage, this can serve as a concise supporting link to demonstrate on-ground counting supported by barcode discipline.
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Stock Taking, Physical Verification of Stock in a Factory
https://www.youtube.com/watch?v=UaTKE1qAPz8&t=2s
Summary: This is the same core stock audit masterclass and it reinforces the central message that inventory must be checked physically and not assumed from books alone. It highlights the value of count accuracy, responsibility fixing, system discipline, and reconciliation logic for factories handling raw material, WIP, and finished goods.
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Barcode based digital Gate Entry | Replacement of Rubber Stamp | Fool Proof | Better Material mgmt
https://www.youtube.com/watch?v=apW6bbPAiwg
Summary: While this video is not only about counting stock, it is strongly relevant to physical inventory control because stock accuracy begins at the gate. It explains barcode-based digital gate entry and better material management, which helps reduce wrong receipts, manual errors, and traceability gaps. It is useful as a supporting control video because stock integrity depends heavily on disciplined inward processes.
Finsys Web pages
Here are 5 readable Finsys pages related to stock, negative stock, and stock management:
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How to Prevent Wrong Stock Situation, Negative Stock, Negative Inventory
https://finsys.co.in/how-to-prevent-negative-stock-negative-inventory
Summary: This page explains common causes of wrong or negative stock, including changing opening stock, back-dated edits, poor discipline, receipt and issue mistakes, and uncontrolled corrections. It also stresses the importance of strong system locks, maker-checker controls, and regular physical verification. The article is especially useful for management teams wanting to understand why ERP stock and actual stock start diverging.
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Physical verification Dos and Donts – Youtube | Mastering Stock Audit: Best SOPs & Physical Verification Methods
https://finsys.co.in/stock-audit-physical-verification-sop-factory
Summary: This page is a detailed stock audit guide focused on factory inventory verification. It covers pre-audit preparation, blind count, freezing transactions, tagging, variance analysis, and the difference between manual and ERP-supported stock checking. It is a strong reference page for businesses that want a structured method for achieving better inventory accuracy and stronger control over raw material, WIP, and finished goods.
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Production Accounting: Theoretical vs Actual Material Consumption
https://finsys.co.in/theoretical-vs-actual-consumption-moulding-erp
Summary: This page explains why theoretical consumption alone is not enough and why actual material usage must be tracked against the BOM. It shows how variance between standard and actual consumption affects stock reliability and why physical stock will not match system stock if actual issues are not captured properly. It is particularly relevant for moulding and process manufacturing environments.
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Best MIS Reports in Finsys ERP – for Management Meeting
https://finsys.co.in/best-mis-reports-in-finsys-erp-for-management-meeting
Summary: This page is useful from a stock management perspective because it points toward disciplined MIS reporting for management review. Although it is broader than inventory alone, it supports the idea that proper reporting culture is necessary for tracking pending transactions, operational exceptions, and stock-related decisions. It helps position stock control as part of a wider management information system.
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Core Benefit of Finsys ERP in Material Management
https://finsys.co.in/core-benefit-of-finsys-erp-new-page-on-finsys-erp-software
Summary: This page is relevant because it references inventory-related control topics such as negative stock and reorder planning among the core benefits linked with Finsys ERP. It helps connect stock management to broader business improvement, showing that inventory discipline is not a standalone activity but part of a stronger ERP-led operational framework for manufacturing businesses.
