What must be completed before conducting a physical inventory?

Before conducting a physical inventory, a complete reconciliation of property records is crucial. This process ensures that all property in the records is accurate and accounted for, allowing for an efficient and effective physical inventory. Reconciliation involves verifying that the quantities and descriptions of property on hand match what is documented in the records. This step is vital for identifying discrepancies, managing items that may be lost or damaged, and ensuring compliance with property accountability policies.

By confirming that the records are in order prior to the inventory, personnel can focus on accurately counting and assessing the physical property without being distracted by potential inaccuracies. This thorough preparation helps streamline the process and can aid in identifying any issues that need to be addressed before moving forward with the actual inventory count.