← The Ultimate Guide to Inventory Accuracy
The Frozen Stock Method: Managing WIP and In-Transit Goods
The biggest challenge in inventory accuracy is motion. How do you count a warehouse when trucks are arriving at the dock and Work-in-Progress (WIP) items are moving through a production line? The industry solution is the "Frozen Stock" method. This isn't about temperature; it’s about a "snapshot in time" that ensures every item is accounted for exactly once.
Defining the "Freeze" Period
A stock freeze is a designated window where no data changes in the system for a specific area. This allows the physical counters to match the "system on-hand" at that exact moment. In a professional audit, this is handled through "transactional suspension." While the physical items might still move in emergencies, the digital records are locked until the count for that zone is uploaded.
Handling Work-in-Progress (WIP)
Counting raw materials is easy. Counting finished goods is easy. But what about a machine that is 50% assembled? To count WIP, professional services often use a "Value-Add" calculation or specific staging tags. Each stage of assembly is assigned a SKU or a percentage value so that the financial audit accurately reflects the labor and parts already invested in the unfinished product.
Managing In-Transit and "Dock-to-Stock" Goods
The most common errors occur at the loading dock. If a truck arrives during a count, those items must be physically quarantined. These are "In-Transit" goods. They are technically on the property but not yet "in the system." A professional counting service will mark these as "Do Not Count" or place them in a specific "Incoming" status to prevent them from inflating the physical count before they are officially received.
The Role of Cut-Off Procedures
A successful frozen stock count relies on a "Clean Cut-Off." This means:
- No new purchase orders are processed 2 hours before the count.
- All shipping labels printed must be physically moved out of the count zone.
- The last Invoice number and Last Receiving number are recorded.
Why Professional Methodology Matters
Amateur teams often forget to account for "Open Orders", items that have been picked and packed but haven't left the building yet. A professional service uses a multi-step verification process to ensure these "invisible" items are neither missed nor double-counted. This level of logistical detail is what separates a "guess" from a "certified audit."