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Warehouse & Inventory Audit Guide

Physical Stock Counts & Variance Reconciliation

Perform scheduled cycle counts and annual physical inventory audits. Compare system book quantities against physical floor stock, identify shrinkage and breakages, adjust batch balances, and automatically post inventory variance journal entries to the General Ledger.

1. Module Overview: Resolving Book Stock vs Floor Stock

In high-volume warehouses, physical stock naturally deviates from digital ledgers over time due to breakage, leakage, picking errors, or unrecorded samples. Regular stock counts protect profitability:

Continuous Cycle Counting

Audit specific high-velocity racks or product categories weekly without halting entire warehouse operations.

Batch & Expiry Precision

Verifies actual quantities per batch number and expiry date, catching expired stock before dispatch.

Automated GL Journals

Posting a count automatically debits or credits Inventory Variance (Account 5150) against Inventory Asset.

2. How to Perform a Stock Count (Step-by-Step)

  1. 1
    Go to Inventory > Stock Counts > "New Stock Count":Select the warehouse and optionally filter by item category or rack aisle. System snapshot freezes the current book stock.
  2. 2
    Enter Physical Quantities Counted:Warehouse staff walk the aisles and enter the actual counted units for each item line and batch. Notes can explain physical conditions (e.g. "5 packs damaged by forklift").
  3. 3
    Review Variances & Cost Impact:Katixo calculates:

    • Quantity Variance = Counted Quantity - System Book Quantity

    • Cost Variance = Quantity Variance × Item Weighted Average Cost

  4. 4
    Post Adjustments:Warehouse manager or accountant reviews the variance report and clicks "Post Adjustments" (POSTED). The system updates stock_balance and stock_batch_balance, adjusts FIFO lots, and writes the financial adjustment journal.

3. Automated General Ledger Adjustment Posting

Posting a stock count automatically balances the physical reality with your balance sheet:

Negative Variance (Deficit / Shrinkage)

Physical count < Book stock:

• DEBIT: Inventory Shrinkage / Variance (5150)
• CREDIT: Inventory Asset (1200)
Positive Variance (Surplus / Found Stock)

Physical count > Book stock:

• DEBIT: Inventory Asset (1200)
• CREDIT: Inventory Gain / Variance (5150)

Developer & API Integration Reference

JWT Bearer Required
GET/api/v1/stock-counts
GET/api/v1/stock-counts/{id}
POST/api/v1/stock-counts
POST/api/v1/stock-counts/{id}/post