Who Really Owns Inventory? Why Finance and Supply Chain Must Work Together

Who Really Owns Inventory? Why Finance and Supply Chain Must Work Together

In manufacturing, inventory is more than just parts on shelves it’s money on the balance sheet. But here’s the catch: finance owns the dollars, while supply chain owns the physical inventory. And if these two teams aren’t aligned, the numbers won’t add up.

Weekly Counts, Real-Time Accountability

Supply chain teams are on the ground, conducting weekly cycle counts to monitor inventory changes. They’re the first to spot discrepancies, missing parts, overages, or miscounts. But they can’t just adjust the numbers on a whim.

Any inventory adjustment over a certain dollar threshold must be reviewed and approved by finance and the operations manager or higher depending on your company’s policy. This ensures accountability and protects the integrity of your financial statements.

When the Same Items Keep Going Out of Balance…

It’s a red flag. Repeated variances often point to deeper issues like inaccurate Bills of Material (BOMs). If the BOM doesn’t reflect what’s actually being used on the shop floor, your inventory records will never be right.

That’s why finance and supply chain must work with engineering to:

• Review and correct BOMs
• Ensure materials are being issued and consumed accurately
• Align physical flows with digital records

Why It Matters

Accurate inventory and BOMs lead to:

• Correct balance sheet inventory values
• Reliable cost of goods manufactured
• Accurate margins and selling prices

When these numbers are off, your business decisions are built on shaky ground.