The Missing 18 Packets
You manage a neighbourhood grocery store in Kanpur that sells about 140 SKUs. At the monthly stock count, the 5 kg atta SKU shows 42 packets on the shelf and in the stockroom, but the perpetual inventory record shows 60. The same count shows 12 extra packets of a slow-moving 1 kg besan SKU. The atta supplier's invoice for last week says 72 packets were delivered, but the receiving sheet signed by the night helper says 60. During a two-hour power cut on three evenings, the cashier sold atta and besan by writing bills in a notebook; those sales were entered into the POS the next morning, but two notebook pages are missing. The store owner wants the books corrected before the accountant's visit tomorrow and asks you whether to claim 12 packets from the supplier. Staff say the atta is the most pilfered item because it is kept near the rear door.
1. Reconcile the atta and besan positions and decide what adjustment, if any, is defensible before the accountant's visit. Show the calculation and state what evidence you would attach.
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Reconciliation before adjustment
- Atta: book 60 minus physical 42 = 18 packets short.
- Besan: physical is 12 more than book = 12 packets excess. The two cannot simply be netted: different SKUs, different values, different causes. The missing notebook pages mean recorded sales may be understated, so part of the atta shortage may be unrecorded sales, not loss. Reconstruct from remaining notebook pages, duplicate bill pads, POS re-entry log and cashier shift report. If recovered pages show 6 atta and 4 besan sold but not entered, the unexplained atta shortage becomes 12 and the besan excess becomes 8. Post any remaining difference as a clearly described suspense/shortage entry; do not silently write it off.
Supplier claim: invoice says 72, signed receiving sheet says 60. The receiving sheet is contemporaneous evidence. Do not claim 12 merely to offset the atta shortage. Ask the supplier for the delivery challan and vehicle record; claim only if the challan proves 72 were unloaded and 12 were later lost or not received. Otherwise treat it as a receiving dispute.
Attach: signed count sheet, receiving sheet, recovered notebook pages, POS re-entry report, supplier invoice/challan, and the names of counters.
2. Identify the two most likely root causes of the stock discrepancy and propose three controls that fit a small store with one POS and no full-time security.
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Most likely root causes
- Manual sales during power cuts were not fully recorded, and there was no pre-numbered control (two pages lost).
- Receiving was single-person and not verified against the invoice; atta is a fast-moving, high-theft item kept near the rear door. A third possibility is a unit-of-measure or mis-scan error between 5 kg atta and 1 kg besan, but the receiving-sheet discrepancy makes the first two stronger.
Three controls that fit this store
- POS downtime procedure: use a pre-numbered duplicate bill book; one person writes and a second enters all bills the same day; the cashier signs the book at close and the manager checks the sequence. Missing pages must be reported the same day.
- Dual receiving: the helper and a second person count and sign before goods are stored; match invoice, challan and physical count; photograph any short delivery. For atta, write the supplier's packet count on the receiving sheet.
- Stock protection and cycle counts: move atta away from the rear door or lock/limit access; count the top 10 fast-moving SKUs weekly, not only monthly; review CCTV or a mirror at the rear door. Keep the besan excess under investigation rather than netting it.
3. The owner says, 'Just add 18 to the besan excess and close it.' Write a short response explaining why that is not acceptable and what you will tell the accountant.
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Why not 'add 18 to besan'
That would create a false stock record and hide two different problems. It would also overstate besan stock by 18 units, which can trigger a wrong reorder and a later write-off. The accountant needs the true position, not a balanced one.
What I will tell the accountant
- Physical count: atta 42; besan 12 more than book.
- Known unrecorded sales reconstructed from notebook pages: [number] atta and [number] besan, with copies attached.
- Unexplained atta variance after reconstruction: [number] packets, value ₹[amount].
- Besan excess: under investigation as possible receiving or mis-scan error; not netted.
- Supplier invoice/receiving discrepancy: 72 versus 60; debit note pending verification.
- Corrective actions: pre-numbered manual bill book, dual receiving check, weekly cycle count of top 10 SKUs, relocation of atta away from the rear door.
A short written note signed by me and the owner is better than a verbal explanation. If the owner insists on netting, ask for that instruction in writing; even then, record it as an accounting adjustment, not as the true stock count.