Inventory reconciliation is the process of comparing what a physical count found with what the records say, explaining every difference, and correcting the records once each correction is approved. To reconcile inventory means to make the books and the shelf agree, with a reason for every change.
Counting produces a list of what was seen. Reconciliation matches it to the records, flags what is missing or unregistered, and investigates each variance instead of simply overwriting it.
Two kinds of reconciliation
| Item | Stock (goods, consumables) | Fixed assets (equipment, IT, furniture) |
|---|---|---|
| What is compared | Quantity per item code and location | Individual items, each with its own tag or ID |
| Typical variance | Counted 46, system says 50: a quantity difference of −4 | Laptop AST-0412 not found; unknown tag in Room 3 |
| Usual causes | Unrecorded issues or receipts, wrong unit of measure, damage, theft | Unrecorded moves, disposals or purchases, loans, duplicate records |
| Correction | Quantity adjustment posted to the stock ledger | Location fix, new register record or approved write-off |
Quantity reconciliation is the stock version: you compare counted quantities with system quantities per item and location. Fixed asset reconciliation works item by item, because each asset is unique. Both end the same way: an approved, evidenced adjustment.
How to reconcile inventory, step by step
- Fix the cut-off. Note the time of the count; movements after it belong to the next period.
- Match counts to records. Pair each scanned tag or counted item code with its register record or stock line.
- List the differences. Unmatched register records are missing. Unmatched counts are unregistered. Matched items in the wrong room are location variances.
- Look for explanations. Check-outs, repair work orders, transfers in transit, wrong units of measure.
- Recount or search. Send someone back to the location before treating any item as lost.
- Propose adjustments. Location fixes, new records for genuine unregistered items, quantity adjustments and write-offs.
- Approve and post. Someone other than the counter approves material adjustments, then the records are updated.
- Keep the evidence. Who counted, who approved, what changed and why. Auditors will ask for it.
Inventory reconciliation example
An extract from the reconciliation of an IT store:
| Item | Register | Counted | Variance | Explanation | Action |
|---|---|---|---|---|---|
| Laptops (tagged) | 40 | 35 | −5 | 3 checked out to staff, 1 in repair, 1 not found | Close 4 as explained; search for 1 |
| Monitors (tagged) | 60 | 62 | +2 | 2 untagged donated monitors | Register and tag |
| Docking stations | 25 | 25 | 0 | All present | None |
| USB headsets (stock) | 120 | 104 | −16 | 10 issued without being recorded; 6 unexplained | Post issue of 10; adjust 6 with approval |
Why not just overwrite the records?
Adjusting the register straight from raw counts is risky: an asset out on loan gets written off, then turns up next week as an unregistered item. Reconciliation separates genuine losses from timing and recording differences, and leaves a trail an auditor can follow.
Common mistakes
- No cut-off. Goods received during the count but not yet booked appear as false gains.
- Netting differences. A +3 and a −3 still need two explanations.
- One person counts, adjusts and approves. Separate those duties for material amounts.
- Fixing the number, not the cause. If the same variance returns every count, the process is broken.
Spreadsheet vs software
In Excel or Google Sheets you export the register, paste in the count, and use a lookup (XLOOKUP or VLOOKUP) on the asset ID to flag missing and unregistered rows. That works for a few hundred items, but breaks down when several people count at once or you must show who approved each change. Asset software matches scans to the expected list per location as they come in and records each resolution in the asset's history. For the report itself, the fixed asset verification report template gives a layout auditors recognize.
Inventory reconciliation in Asetavo
In Asetavo, stock-takes (Growth plan and above) are counted room by room, and each scan is matched against the expected list as you go: expected, found, misplaced and unknown. After you submit and reconcile, each variance is resolved one by one with Found it, Still searching or Write off, on the phone or on the web, and every change is kept in the asset's history. The native iOS and Android apps, coming soon, count offline; the web app at app.asetavo.com works in any phone browser today. See audits and stock-takes on mobile.
