The Importance of Regular Audits
In a jewellery business, inventory is the biggest asset. Even a single missing ring can mean a loss of thousands of rupees. Regular stock audits (physical verification) ensure that the theoretical stock listed in your software matches the actual physical pieces sitting in your trays and vaults. It deters internal theft and identifies tagging errors.
Types of Audits
Audits can be continuous (cycle counting) or periodic. In cycle counting, staff audit one specific section every day (e.g., the rings tray on Monday, chains on Tuesday). Periodic audits usually happen quarterly or at year-end (during Diwali or financial year closing), requiring the entire store to be counted over a weekend.
The Traditional Weight-Based Audit
Before barcodes, audits were done by weighing trays. A tray of 50 rings was put on a scale. If the total weight was 250 grams, and the ledger showed 250 grams, it was deemed correct. However, this method is highly vulnerable. A thief could steal a 5-gram gold ring and replace it with a 5-gram fake brass ring. The tray weight remains the same, masking the theft.
The Modern Tag-Based Audit
Modern audits rely on QR barcode scanning. Every piece of jewellery has a tamper-proof tag with a unique ID (and HUID). During an audit, staff scan each tag. The software checks off each scanned item. This ensures not just the weight, but the exact specific item is present. It instantly highlights exactly which specific piece is missing.
Handling Discrepancies
When an item is marked missing, the reconciliation process begins. The common reasons include: 1) The item was sold but billed under a wrong generic code. 2) The item was given to a karigar for repair and the entry was not made. 3) The tag fell off and was replaced incorrectly. Only after exhaustive checking should an item be written off as lost or stolen.