What is the purpose of inventory reconciliation?

The purpose of inventory reconciliation is to align records with actual inventory. This process ensures that what is recorded in inventory management systems matches the real quantities of stock on hand. By conducting reconciliation, organizations can identify and rectify discrepancies resulting from errors in data entry, theft, damage, or miscounting. It is crucial for maintaining accurate inventory levels, optimizing stock management, and improving financial accuracy.

Aligning records with actual inventory helps businesses make informed decisions about purchasing, sales, and inventory control, thereby preventing stockouts or overstock situations. The reconciliation process ultimately supports better operational efficiency and financial health for the organization.