स्टॉक ऑडिट

What is a Stock Audit?

A stock audit is an independent check, done by a Chartered Accountant, that your physical inventory matches your books and the stock statements you give the bank. It also checks valuation, condition of stock and insurance.

For bank borrowers it decides the Drawing Power (DP), the amount you can actually draw from your cash credit or overdraft limit.

Who Needs It?

• Borrowers with cash credit or overdraft limits against stock and debtors (banks usually require it periodically, commonly for larger limits)
• Manufacturers, traders and wholesalers
• Companies needing inventory valuation for audit
• Businesses wanting to detect shortages, pilferage or obsolete stock

How Drawing Power Works

Drawing Power is roughly eligible stock × (100% − bank margin), plus eligible debtors after their margin. Margins are commonly around 25–40% on stock, depending on the bank. Slow-moving, damaged or expired stock is treated as ineligible.

If the audit finds less stock than you reported, your drawing power falls and any excess withdrawal may have to be repaid.

What the Auditor Checks

• Physical stock against book records and bank stock statements
• Valuation of raw material, work-in-progress and finished goods
• Ageing, damaged and slow-moving stock
• Debtors and creditors reconciliation
• Insurance cover and security of stock
• Accuracy of monthly stock statements
• Internal controls over inventory

Documents to Keep Ready

• Loan sanction letter and bank statements
• Monthly stock statements submitted to the bank (last 6–12 months)
• Drawing power register or worksheet
• Stock registers, purchase and sales invoices
• Debtor and creditor lists
• Insurance policies
• Previous stock audit reports

Stock Audit Process – Step by Step

1. Collect sanction terms, stock statements and bank data.
2. Plan the visit and fix the audit date.
3. Physical count and verification at your premises.
4. Reconcile physical stock with books and bank statements.
5. Compute drawing power and review valuation.
6. Submit the CA-signed report in the bank’s format with observations.

Tips to Avoid Adverse Findings

• Submit accurate stock statements to the bank every month
• Keep records updated and reconciled
• Separate damaged and old stock
• Keep insurance valid
• Respond to the auditor’s queries quickly

Adverse findings can reduce drawing power, make the account irregular, or lead the bank to recall the loan.

Why eMitrawala?

• Experienced team for quick document checking and filing
• Support from application to certificate
• Renewal and compliance reminders
• Clear pricing with no hidden charges