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Inventory Reconciliation Services: Securing Your Supply Chain and Profitability

For trading and manufacturing companies, Inventory is typically the largest current asset and the most complex account to manage. Inventory Reconciliation Services are the critical function that verifies the integrity of your stock, ensuring that your physical counts and warehouse movements perfectly align with your financial records.

At Algebraa Business Solutions Private Limited, we specialize in transforming inventory data from a source of financial risk into a controlled, reliable asset. We secure your supply chain, guarantee accurate valuation, and ensure your Cost of Goods Sold (COGS) figures truly reflect your business performance.

The Imperative of Absolute Inventory Control

Unreconciled inventory leads to disastrous financial consequences, creating "hidden areas" of risk that erode profitability and corrupt the Balance Sheet.

A. Protecting Profitability and Valuation

  • Accurate COGS: Inventory reconciliation ensures that all costs—including those captured during Landing Cost Calculations for imported goods—are correctly transferred to COGS upon sale. Errors here directly corrupt gross profit margins.
  • WAC Integrity: We specialize in verifying and rectifying the Weighted Average Costing (WAC) methodology in your accounting system, ensuring inventory valuation is precise and compliant with IFRS/GAAP.
  • Eliminating Shrinkage: Reconciliation identifies discrepancies caused by theft, damage, obsolescence, or administrative errors, allowing management to stop hidden leakage and enforce better Warehouse Management (WHM) controls.

B. Compliance and Audit Readiness


Inventory is a prime target for external auditors. Our rigorous process guarantees:

  • Balance Sheet Reliability: We ensure the final inventory valuation presented on your Balance Sheet is accurate, verifiable, and free from material misstatement.
  • Audit Trail: Our service provides a clean, documented audit trail for all inventory adjustments and valuations.

Our Specialized Reconciliation Process

Our approach goes beyond simple book-to-physical checks. We perform a forensic reconciliation that verifies the underlying system logic and transaction flows.

A. The Systemic Verification Model


  • System Configuration Audit: We first verify your Software Configuration, ensuring that your ERP is correctly set up to track inventory valuation (FIFO, LIFO, WAC) and that all transaction types (Receipts, Shipments, Transfers) are correctly linked to the relevant financial accounts.
  • Book-to-Physical Verification: We reconcile the quantity and value of stock recorded in your accounting system against the physical counts recorded in your warehouse or WMS.
  • Investigating Variances: Any variance is not just noted; it is forensically investigated to determine the root cause: whether it's an operational error (lost goods) or a financial error (incorrect costing entry).

B. Rectification and Control


  • Journal Entry Rectification: We prepare and post necessary adjustments to correct inventory values and quantities, ensuring the General Ledger reflects the verified physical reality.
  • Procedure Implementation: We help implement the necessary standard procedure and strict Checklists to be used by the warehouse and finance teams, preventing recurrence of the errors

Strategic Benefits for Operational Excellence ​

A clean inventory ledger is the foundation for efficient operational and financial planning.

Improved Forecasting and Purchasing

Accurate inventory records provide reliability for sales forecasting and Budget-Actual-Variance Analysis, leading to smarter purchasing decisions, reduced stock-outs, and minimized obsolete inventory write-downs.

Enhanced Management Reporting ​

Clean inventory data allows for accurate Job Costing and product profitability analysis, ensuring that your MIS Reports truly guide your strategic product and pricing decisions.


Partner with Algebraa
Transform your inventory control. Gain the confidence of guaranteed accurate valuation, fortified against risk, and optimized for maximum profitability.