Physical Inventory Why?

Physical Inventory Why? Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • Agenda • Purpose of a Physical Inventory • Value of a Physical Inventory • Discuss Outcomes • Methods • Physical Inventory Plan • Reconciliation • Summary • Questions Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • Its the method by which an organization, corporation, university etc test the accuracy of their property records (Property Business System (PBS)) • Accuracy of the PBS meets the following business and legal requirements • Financial • Sarbanes-Oxley • Government Account Standards Board (GASB) • Federal Acquisition Regulations (FAR) • Contract • Corporate Policies and Procedures • State and County Regulations (property taxes and income tax) • Department of Transportation • Insurance Reports Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • What is the value of a Physical Inventory • Its the best method of determining health measures of the property management system/PBS: • Significant discrepancies may indicate: • Theft, • Poor Security • Inadequate documentation • Locations errors may indicate: • Movement issues • Poor recording keeping • Poor Training or communication Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • Value of a Physical Inventory (Continued) • Identifying property not posted to the management property system may indicate: • Inadequate interfacing with procurement • Failure to report acquiring property by the users • Unlocated property at the conclusion of the inventory reconciliation may indicate: • Movement Issues • Disposition Issues • Lack of training or communication concern the care of property Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • Value of a Physical Inventory (Continued) • Outcomes from performing an inventory • Verification of Property Management Property Records • Utilization ( is the asset being used) • Maintenance ( verify calibration, proof loading stickers) • Organization can more confidently do contingency or capacity planning • Validation of computer system configuration Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • Value of a Physical Inventory (Continued) • Note that the value gained from a well-managed physical inventories conducted at the appropriate intervals will usually far out weigh their cost and the disruption caused Barbara A. Finnegan, CPPM CF

Physical Inventory Why? Customer and Capital • Inventory Frequency • Depends on type property • Depends on regulations and contract • Depends on Hazard and Security Requirements • Types of Frequencies of Inventory • Periodic • Continuous ( inventory by exception) • Annual (calendar/or 12 Months (Fiscal)) Barbara A. Finnegan, CPPM CF

Physical Inventory Why? Capital • Types of Frequencies of Inventory • Periodic • Continuous ( inventory by exception) • Annual (calendar/or 12 Months (Fiscal)) • Types of Inventory Methods • Cyclical Inventories • Contract Termination • Wall-to-Wall • ABC Inventories • Statistical Samplings Customer Property Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • A detailed, specific plan is most critical to a successful inventory. Without a detailed plan with specific objectives the inventory will probably not be successful. Customer and Capital Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • Inventory Plan • Specific inventory objectives • Specify type of property to be inventoried • Inventory time frame, start and completion date. • Method of performing the inventory • Identify personnel performing the inventory and provide the details of the plan. • Identify the inventory strategy • Identify the information to be collected during the inventory Customer and Capital Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • Inventory Plan (continued) • Shall accommodate daily schedules • Data load and upload strategy • Controls to be put on items being inventory • Shall a method to reconcile discrepancies • Contingency plan to react to movement of property and personnel; change in personnel etc. • Strategy for assuring record update accuracy • Inventory planners should arrange to meet with coordinators and inventory takers, users in the and supervisors as necessary during the inventory plan process to get agree on the plan and schedule. Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • Inventory Plan (continued) • Conducting the inventory based on the Plan • Reconciliation • Most important Phase • Notification of the accountable organization and posting of items not found • Second attempted to locate the missing property • An inventory is used as a corrective action tool. • Report results of the inventory Barbara A. Finnegan, CPPM CF

Physical Inventory Why? • In summary • Is a necessary burden on the property manager • A successful inventory is an accurate and, efficient property management system. • Purpose/Goal of a physical inventory is to ensure that a the assets recorded in the property system physically exist; identify unrecorded or improperly record transactions; to identify excess; defective or obsolete assets Customer and Capital Barbara A. Finnegan, CPPM CF

Physical Inventory Why? Barbara A. Finnegan, CPPM CF

Physical Inventory Why?