What to do when a surplus turns up

When a revision finds a shortage, everyone is alarmed. When it finds a surplus, many relax: "If there's extra, there's no loss." That is a mistake. A surplus, like a shortage, shows that something in the records is wrong. Today it looks harmless, but tomorrow the same error may turn into a shortage or a mismatch in taxes and reporting. What should you do when a surplus turns up, and what should you look out for?

What a surplus means

A surplus is when the actual balance is greater than the book balance. The goods are in the warehouse, but the records do not show them or show too little. So an error crept into the documents when the goods were received, or afterwards. The good news is that the cause of a surplus is often easy to find. The bad news is that the goods are invisible in your reporting: if you sell them, there is no basis for an issue document, and later the question arises: "Where did these goods come from?"

The most common causes

• an unrecorded receipt: the goods arrived but the delivery note was never entered;
• wrong receiving: the supplier sent more than the document says and nobody counted on arrival;
• returns: a customer returned goods, they were booked in, but the original sale was not cancelled, so they were counted twice;
• an issue entered twice: the goods left once while the document was posted twice;
• an unrecorded transfer: goods came from another warehouse but were not booked in here;
• mixed-up articles: a surplus on one position and an equal shortage on its neighbour;
• third-party goods: goods belonging to a customer or partner left for safekeeping but not set apart.

Almost all of these causes come down to paperwork flow and human inattention. So whoever finds a surplus should ask not "who is to blame?" but "which document is missing?"

What to do

1. Recount the position, especially if the difference is large. A counting error is the most common cause of a surplus too.
2. Check neighbouring articles and those with similar names. The pair to a surplus is often a shortage on the neighbouring position.
3. Go through the latest receipt and return documents: has the receipt been entered, and has it been counted twice?
4. Establish where the surplus came from: the supplier's delivery note, batch number, packaging marks.
5. Only when the cause is clear, book the goods in and give an explanation in the report.

An example. A surplus of 40 pieces at 5,000 so'm each is found, 200,000 so'm in all. Going through the documents shows that the delivery note for the batch that arrived last week was never entered. Now the cause is known: the goods must be booked in, and it is worth understanding why the delay happened, for instance if the storekeeper did not pass the receipt document to accounting in time.

The hidden danger

In its most dangerous form a surplus works like this: someone keeps it "in reserve" and later uses it to cover a shortage somewhere else. For instance, a surplus on one position is written off as the shortage of another, the total comes out close to zero, and nobody notices a problem. So never treat a surplus as "profit", and do not allow shortages to be covered by surpluses. Each difference should be examined separately, with its own cause.

So that it does not recur

Once a surplus has been found, establish the cause and fix the process. Receipt documents should be entered in the records on the day the goods arrive. On receiving, goods are counted against the delivery note, and if there is a surplus or shortfall an acceptance report is drawn up. There should be a separate procedure for returns. Write each surplus case in the revision log: soon you will see the same cause coming up again and again.

Conclusion

A surplus, like a shortage, is a signal: there is a gap between the records and reality. Look at it not with delight but with care. If you need help finding the cause, the Reviziya team can compare the documents, establish where the surplus came from and have it properly formalised.