Consignment and third-party stock

In a stock count, everything on the shelves is counted. But not every box on the shelf is yours. In the warehouse of an electronics wholesaler stand 120 televisions belonging to a supplier on commission, while the company's own goods have sat with a dealer in Samarkand for eight months without anyone confirming them. In the first case inventory looks overstated; in the second nobody has checked that the goods exist at all. The general rule for such places: what matters is not whose warehouse the goods are in, but who owns them.

Two directions

The problem comes from two sides:

• Other people's goods in your warehouse: consignment, commission, custody stock, a customer's goods left for a time.
• Your goods in other hands: a regional dealer, an agent, a 3PL operator, a batch stored in a marketplace warehouse, a market stall.

In the first case the risk is that inventory, balances and sometimes liability look larger than they really are. In the second the asset is in the books, but nobody has checked who is holding it and how.

First direction: someone else's goods in your warehouse

The auditor first asks for the contracts: which goods were accepted without transfer of title? Then they see how those goods are recorded.

1. Are the third-party goods physically segregated, and marked with a sign or label?
2. In 1C are they held in a separate account (off-balance or a separate register), or mixed into ordinary stock?
3. During the count are they written on a separate sheet?
4. Do you report to the owner when they are sold, and within what time?
5. Who bears the loss if the goods are lost or damaged? Is there insurance?

The auditor does not just ask but goes to the warehouse and looks personally. Mixing is the commonest danger. If 120 televisions slip into ordinary stock, the company may sell them as "its own" and set a price, and when the owner asks for the goods back, they are gone.

Example: a blended balance

In 1C the televisions show a balance of 340 units, the count also found 340, so everything looks in order. But 120 of them are on commission, that is, they belong to the supplier. The company owns only 220 televisions. If the cost of one television is 3,000,000 so'm, inventory is overstated by 360 million so'm. If the supplier asks for the goods back, the company's real stock falls by a third at once, and the sales plans fall apart. The count result will not reveal the error here: the problem lies not in the quantity but in ownership.

Second direction: your goods elsewhere

Here the key evidence comes from outside. The auditor asks the party holding the goods for written confirmation: a list is sent saying "as at this date the following goods are shown as held by you", and they return it confirming the balance and condition. You cannot rely only on your own records, because you do not know what goes on inside the dealer. If no reply comes, the request is repeated and that is recorded too: silence is not confirmation.

For the Samarkand dealer at least four things are checked:

• whether there is a handover certificate signed by both parties;
• whether recent sales reports keep coming from the dealer, and whether they agree with your shipments in 1C;
• whether there have been settlements (money or returns) in the eight months;
• whether the names, quantities and serial numbers agree with the dealer's own stock list.

The same applies in a marketplace warehouse: compare the platform's stock report with your own shipments and sales in 1C. A difference signals a shortage or an unrecorded return.

The document set

For each case the file should hold the contract (consignment, commission or custody), handover certificates, written confirmations and the latest sales reports. The contract should state when title passes, who bears losses and the return deadline. For precise legal questions, consult a lawyer.

Common mistakes

• Third-party goods are entered on the count sheet in the general line.
• Dealer reconciliations are not done even once a year.
• The contract has no return deadline, and the goods lie with the dealer "forever".
• Goods are left "temporarily" on a verbal agreement with no documents.
• The confirmation request goes out only through the storekeeper, and the auditor does not receive the reply directly.

Conclusion

A balance is reliable only if it shows your own goods as your property. For third-party and outsourced goods, OmborAudit compares contracts, confirmations and sales reports, and supports title with documents.