A stock count variance review should explain the difference between physical quantities and the ledger before an adjustment is approved. Preserve the original count sheets and the ledger snapshot used for comparison. Do not classify every shortfall as theft or every surplus as new income.

Accounting records, calculator and glasses on a desk
Illustrative photograph by Cht Gsml.

Establish a comparable count

Record the count date, location, item code and unit of measure. Check whether stock movements continued during counting and how those movements were controlled. A carton and an individual unit can create an apparent variance without any goods being missing.

Arrange a documented recount of exceptions where appropriate. Keep the first result as evidence rather than replacing it with the preferred number.

Trace movements and ownership

Compare receipts, dispatches, transfers and returns around the count. Identify goods held for others and company-owned goods held elsewhere. Ask the accountant how those facts affect the reconciliation instead of assuming everything in the room belongs in the company’s stock balance.

Build an item schedule showing ledger quantity, counted quantity, movement explanation and remaining difference. Separate quantity investigation from any review of damage, obsolescence or valuation.

Example: goods moved between locations

One location shows a shortage while another shows a surplus. A transfer document may explain both, but verify item codes and timing before netting them. An unrelated surplus should not conceal a genuine shortage elsewhere.

Approve and preserve the conclusion

Have the accountant review supported corrections and unresolved differences. Keep the original count, investigation, approved entry and revised ledger together. IRAS expects business transactions to remain explainable through records; the reconciliation should show what evidence justified each adjustment.

Related practical guidance

For the surrounding records and responsibilities, see bookkeeping basics, company records to keep, bookkeeping and accounting.

Official guidance: IRAS official guidance.

Help with your company records

For accounting, bookkeeping and related compliance support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or process need attention so we can discuss the relevant next steps.