Management of Inventory

Procedures

Safeguarding Inventory

Prior to establishing inventories for supply and resale, a department must establish proper internal controls in accordance with sound business practices, including:

  1. Segregate duties so that different people are responsible for ordering inventory, distributing inventory, and paying vendors
  2. Independence of the staff performing the physical inventory counts from the merchandise ordering, sales, and reconciliation functions
  3. Create written procedures detailing how inventory is protected from theft, abuse or physical damage, and how obsolete inventory is determined
  4. Cooperate with the Office of Internal Audit when it establishes and reviews operating procedures

Inventory Management

To appropriately manage inventory and ensure proper recordkeeping, departments should ensure the following are part of their inventory processes:

  1. Label items when put in stock to make later identification and valuation possible
  2. Require management approval of adjustments to inventory records because of physical inventory counts
  3. Ensure punctual and accurate recording of the approved adjustments in the unit’s inventory management system
  4. Reconcile physical inventory counts to inventory records (whether periodic or perpetual)
  5. Determine if the department will use a perpetual or periodic inventory system

Training

PRO 303: Internal Controls

PRO 304: ChartFields: Navigating Financial Transactions at UF

Contacts

Auxiliary Accounting: (352) 294-7236

Directive Statement

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