Your stock ledger says one thing. Your warehouse says another. Somewhere between them sit a few hundred differences nobody has had the time to work through — and until they are worked through, every report built on that ledger is unreliable.
A physical count tells you what is there. Reconciliation tells you why the records disagree with it. Those are different problems and they need different engagements.
Often the honest answer is both: count first, then reconcile. We will tell you which you need at the scoping call rather than sell you the larger engagement by default.
Negative stock. A negative balance means an issue was booked before the corresponding receipt. It cannot be a real position. We list every negative balance in the ledger with its item, location and date, because each one is both a correction to make and a control finding to act on — and because auditors ask about them.
Marketplace and 3PL reconciliation. For e-commerce sellers and D2C brands the stock cannot be counted, because you do not hold it. Reconciliation here means matching your books against the platform's or the 3PL's own inventory report, and accounting for the lag created by returns, RTOs, unsellable inventory and reimbursements. It is a documentary exercise, and it is frequently the only verification available. See e-commerce accounting.
ERP migration cleanup. Opening balances in a new system are only as reliable as the reconciliation behind them. We prove the closing position in the old system, identify what should and should not carry over, standardise the item master and units of measure, and hand over a migration-ready stock file with the workings.
We classify before we conclude. A variance is not a loss until the other five causes have been eliminated. Firms that report gross variance as shrinkage produce numbers that alarm boards and mean nothing.
We fix the cause, not just the number. The process-findings section is the part that stops you buying this engagement again in six months.
We hand over entries, not homework. The correction schedule is designed to be posted, not interpreted.
One team. DSG Corporate Financial Advisors LLP — in-house Chartered Accountants, Company Secretaries, Cost Accountants and lawyers, so a reconciliation that turns into a GST exposure or an audit qualification stays with the same people.
The process of comparing recorded stock against physical or counterparty-reported stock and explaining every difference between them — by cause, not just by amount.
A stock audit includes a physical count, a documented cut-off, a sampling basis and an independent report. Reconciliation is the records-side exercise of explaining differences. Reconciliation is a step within a stock audit; it is also a standalone engagement when the count already exists and the differences were never closed out.
Six recurring reasons: timing differences around the cut-off, unit-of-measure errors, duplicate or wrong item codes, unrecorded movements, condition issues mistaken for quantity issues, and genuine loss. In most engagements genuine loss is the smallest of the six.
That an issue was recorded before the corresponding receipt. It is physically impossible, so it always indicates a records error. It also invites audit and departmental questions, which is why every negative balance is listed and cleared.
Yes. Where you do not hold the stock, reconciliation is against the custodian's or the platform's own inventory report, with returns, RTOs and unsellable inventory accounted for separately. For many e-commerce sellers this is the only verification available.
Not always. If a recent count exists and the variances were never closed, reconciliation alone is enough. If nothing has been counted this year, or you need independent evidence of existence, count first — see stock audit. We will tell you which at the scoping call.
A documented reconciliation, with each difference traced to a cause and supported by records, is the basis on which a reply is built. GST law requires stock records under section 35 of the CGST Act and rules 56(2) and 56(12); it does not require physical verification. Where a discrepancy has been alleged, what matters is whether you can explain it from your records.
It depends on SKU count, number of locations and the state of the data. Most of the time is spent on data quality, not on comparison. We give a timeline with the scope after the scoping call.
Send us a stock ledger extract and tell us what you are trying to close. We will tell you whether this is a reconciliation, a count, or both.
Useful to know up front: which ERP or accounting system you run — Tally, SAP, Oracle, Zoho, Busy, something custom, or spreadsheets — roughly how many SKUs and how many locations, and what is driving this. Persistent variances, negative stock, an ERP migration, a marketplace or 3PL mismatch, a statutory audit query, a GST notice and a first-time cleanup are six different engagements.
CorporateWalla, operating under DSG Corporate Financial Advisors LLP, 129A Bangur Avenue, Block A, Kolkata 700055.
We will tell you whether the fix is a reconciliation, a count, or both — and price only what the job needs. Call 72783 76654. Mon–Sat, 10:00 AM – 7:00 PM IST.
