Inventory cut- off date & its application
The physical inventory counting process is highly dependent on a stationary inventory. This means that there can be no movement of inventory into or out of the warehouse area during the counting process, nor can there be a movement of any related paperwork. If this basic rule is not followed, you will have great difficulty in determining the true value of the ending inventory, because the quantities were in flux during the count. This article contains sample procedures that are applicable in most situations for ensuring a proper period-end cutoff of all inventory-related transfers. The procedures cover receiving, central stores, and the finished goods storage area.