POSTED BY Laura Glasscock | POSTED IN Blog, CTRM

Inventory Reconciliation Without Spreadsheets? Yes!

If your business is like many others, your personnel spend a great deal of time and effort ensuring that your inventory numbers are accurate. Inventory accuracy has far-ranging implications. In an integrated system, it allows traders to know their salable volume and what they need to purchase for future obligations. It also enables schedulers to accurately plan inventory moves and helps to provide important information on production, demand, and asset efficiency.

Flexibility and Efficiency

Ensuring that you have accurate inventory numbers may include a manual, cumbersome process outside of your commodity trading and risk management (CTRM) system. Often, this may be a spreadsheet in which you track issues and work to true up your book number with your actual inventory. Doing inventory reconciliation outside of your CTRM system allows for some flexibility, but this also means you need to consistently update your data from your system and risk inconsistencies.

Using RightAngle, there is a better way. RightAngle has a powerful inventory-management system that automatically reports up-to-date inventory information. It is an integrated, company-wide system that serves as one centralized record to eliminate inconsistencies across business groups or locations. Many CTRM systems may have single book volume at the end of the month, but RightAngle is unique in that it contains both book and actual volume, and has the functionality for users to reconcile the two volumes.

Using Inventory Reconciliation

Within RightAngle, inventory accountants and managers can track their inventory at configurable groups, including locations, products, commodities, contracts, and many combinations of all four. Using the Inventory Recon tool, discrepancies between book and actual volume can be tracked and acted upon throughout the month. If discrepancies cannot be rectified before the end of the month, they can be saved and carried from month to month until they are written off or corrected.

In a typical month, this process begins with an inventory accountant comparing RightAngle book volume to the actual inventory volume. Using the Inventory Recon tool to compare the two numbers, the inventory accountant notes that there is a large discrepancy and begins an investigation. Because it is the end of the month and the issue cannot be corrected before the accounting period ends, the inventory accountant creates a missing item line in the Inventory Recon tool to reconcile the book and actual volume. If the movement comes in the next accounting period, the inventory accountant can delete this missing item and move on. If not, the inventory accountant can keep this line until it is fixed or they can adjust this line to create a write-off and move on.

Using a system that contains both real-world and book volumes, such as RightAngle, gives users a powerful advantage. There is an audit trail for write-offs and adjustments that need to be made, and monthly accounting within the system. Using your CTRM system for inventory reconciliation allows for the possibility of creative technical solutions to automate the process and further simplify it for you.

To discuss how your organization can enhance its inventory reconciliation, please contact us at info@capspire.com.

About capSpire

capSpire, a global consulting and solutions company with a focus on energy and commodities, provides the unique combination of industry knowledge and business expertise required to deliver impactful business strategies and solutions. Trusted by some of the world’s leading companies, capSpire’s team of industry experts and senior advisors enables clients to effectively streamline business processes and attain maximum value from their supporting IT infrastructure. For more information, please visit www.capspire.com.