Why your stock register and your books disagree at month end
The difference is rarely theft and rarely one big mistake. It is usually five small habits, each of which a single shared record removes.
Every month end, someone in accounts asks the store for a closing stock figure. The store sends a number from the register. Accounts compares it with the value in the books, finds a gap, and spends the next three days explaining it. The gap is rarely theft, and it is rarely one big mistake. It is usually the sum of five small habits.
1. Receipts entered on different days
Material arrives on the 30th. The store enters it in the register that evening. The purchase bill reaches accounts on the 3rd and is booked in the new month. For one night and three days, the same 400 kg of resin exists in the store but not in the books. Multiply that by every late bill in the month.
In a single record, the goods receipt note creates both the stock movement and the provisional liability at the same moment. The bill, when it arrives, matches against that receipt instead of creating a new entry.
2. Issues to production that never reach accounts
The shop floor takes material on a slip. The store reduces the register. Accounts sees nothing until someone passes a consumption journal at month end, often as a single estimated figure. Work in progress becomes a balancing number.
When issues are made against a job card, the consumption posts at the value of the batch issued, the day it is issued. WIP becomes a figure you can explain line by line.
3. Units that do not match
Bought in kilograms, stored in bags, issued in kilograms, costed per bag. Each conversion is done by hand in a different place, with a slightly different factor. Over a year, the drift is real.
Holding the conversion on the item itself, once, means every floor converts the same way.
4. Returns and rejections handled outside the system
- Rejected material sent back on a delivery challan, with no debit note raised
- Customer returns put back on the rack without a credit note
- Regrind and scrap reused without being counted in or out
Each one moves quantity without moving value, or value without quantity. A shared record refuses to do one without the other.
5. Valuation done in a spreadsheet
The register knows quantity. The books know value. The valuation that joins them is often calculated in a spreadsheet at month end, using rates someone copied from the last purchase bill. When the method lives in a spreadsheet, it changes with whoever opens it.
Running weighted average or FIFO inside the stock ledger means the value in the books and the value of the stock on the floor are the same number, calculated the same way, every day.
What to try this month
Before changing any software, pick your ten highest value items and reconcile them by hand for one month: every receipt, issue, transfer and return, against both the register and the books. The five habits above will show themselves within a week. That list is the scope of your foundation.