It involves a comprehensive physical inventory count from wall to wall, counting each and every inventory article. It is a strict tight rope audit during which all operations are placed to halt and long hours working is assumed to ensure minimum time taken in the process. Detailed stock reconciliations with due explanations for all the variances are compiled and necessary follow up action plan is chalked out for future implementation. This exercise is a substantive audit process and resorted to not more than once in a quarter or may be only twice in a year, depending on the size and nature of the particular business, coupled with the state of internal control in place. As Indian retail market is in a developing phase, more of such substantive audits are resorted to here than as compared to developed markets where sophisticated and automated internal controls are in place.

It is akin to warehouse wall to wall inventory except that in case of the retail store the level of inventory is relatively quite low. It is also a substantive inventory count where operations are halted during the audit process. However at VGNC, we plan the timings in such a manner that the floor inventory is undertaken overnight and in day time back rooms are covered such that there is no halting of sales, after all, sales is the spring where from all business is fed and nourished.

In this model, inventory is classified into non-moving, slow-moving and fast- moving inventory. The idea is to complete the substantive physical inventory of fast-moving items in minimum possible time and lift the halt from operations just after that. The inventory count of non-moving and slow -moving items is undertaken without halting operations of fast moving items. Further, the audit plan is so designed that non-moving and slow-moving items are audited with lesser frequency while fast moving items are audited at more frequently in time, almost perpetually, say, on monthly basis. This inventory audit model achieves optimum efficiency without hindering operations to achieve round the year sales window open for maximum time duration.

Partial inventory is resorted to for some selected products. The reasons may be to count new season products, to count some new stock arriving at large quantity from some new supplier, to count some lots being scraped or dismantled being no longer fit for sales or to count some lots which are the subject matter of internal stock transfer. The aforesaid are few instances where inventory count is undertaken to count specific lots for a specific purpose in the course of regular business operations.

To keep the floor team on alert and to inculcate a sales discipline towards customer service and organizational integrity, we provide surprise inventory check services wherein none is informed about the timings of the surprise audit irrespective of his rank. In this model, we randomly select the outlets for surprise visits and we conduct surprise audits randomly for any lot of inventory and merchandise. The audit reports are also quick and fast what we call as flash reports.