Every warehouse counts its stock, but in a bonded warehouse the match between the records and the physical situation is a legal obligation. Goods in a bonded warehouse are goods on which duty has not been paid, and their records create liability towards the authority.
This article covers the types of count, how shrinkage is distinguished from loss, and how discrepancies are prevented.
Types of count
| Periodic count | The whole stock is counted at set intervals |
|---|---|
| Cycle count | A small part is counted every day, spread over the year |
| Spot count | One item or one rack is verified on the spot |
| Movement count | Quantity and lot are verified at the moment of dispatch |
Shrinkage and loss are not the same
Shrinkage is an expected reduction arising from the nature of the goods: moisture loss, offcuts, dusting. Loss is an unexpected reduction; the usual causes are a wrong dispatch, damage, mixing or a recording error.
To tell them apart you need to know in advance how the goods behave. In steel, shrinkage mostly comes from dimensional tolerance and cutting waste; in coil, moisture can cause surface loss.
The cause is usually not the count itself
- Recording the theoretical weight from the delivery note instead of weighing at intake
- Recording the same item in two different units (pieces and kilograms)
- Entering partial withdrawals in one batch at the end of the day
- Lot numbers that do not match the rack label
- Damaged goods moved to a separate area without being deducted from stock
Records and the count report
The result of the count is put in a report; each discrepancy is listed individually with its quantity, unit and reason. The signatures of the people who counted and verified are the only evidence in any later examination.
The warehouse records must also be reconciled with the customs declarations: the declared quantity, the intake record and the rack stock should show the same figure.
Practical ways to prevent discrepancies
Weighing at intake, a second check at dispatch and recording every movement as it happens remove most discrepancies at source. Cycle counting breaks the big year-end surprise into small pieces.
We covered stock accuracy in a separate article; the counting routine works together with the location and labelling discipline described there.
