If your business invoices goods through TIMS or eTIMS, stock records must tell the same story as your invoices. KRA is preparing to roll out its stock management functionality, but the duty to keep accurate, up-to-date stock records is already in force.

That makes this a practical year-end priority. A clear process now can help you spot gaps before they disrupt your bookkeeping or lead to questions about your returns.

Key points

  • The record-keeping duty is current. Section 23A(2)(b) of the Tax Procedures Act, 2015 requires businesses invoicing through TIMS/eTIMS to keep accurate, up-to-date electronic stock records that reconcile with invoiced goods.
  • Record every movement. This includes goods received, purchased, sold, transferred, returned, adjusted or otherwise disposed of in the course of business.
  • KRA expects full implementation of the stock module in January 2027. Prepare now, and follow KRA announcements for final technical instructions.
  • Reconcile stock with invoices and purchases each month. Investigate and document differences rather than carrying them forward without explanation.

Why eTIMS stock tracking matters now

KRA’s September 2026 public notice says taxpayers using TIMS/eTIMS must maintain accurate and up-to-date stock records. It also says those records should show how goods move through the business and support accurate tax returns and reporting. The notice announced stakeholder consultation forums beginning in September 2026.

This is not a new obligation that starts only when the module goes live. Section 23A(2)(b) of the Tax Procedures Act, 2015 already requires the relevant businesses to maintain electronic stock records that reconcile with their invoices. KRA’s planned functionality is intended to support implementation of that requirement.

The connection matters because KRA validates income tax returns against eTIMS data. If your invoices show sales that your stock records cannot explain, KRA may raise a query. That does not mean every stock difference automatically results in an assessment. It does mean you need records that let you explain what happened.

For the relevant notice and legal background, see KRA’s public notice on the stock management functionality and the Tax Procedures (Electronic Tax Invoice) Regulations, 2024.

What KRA’s stock management functionality is expected to do

The stock management functionality is intended to help businesses track goods as they enter, move through and leave the business, alongside electronic invoicing. In practical terms, your stock records and eTIMS invoices should support a consistent account of what you bought or received, what you sold and what remains.

This does not mean every business needs a complex new system immediately. You do need a reliable way to record movements and match them to supporting documents. Depending on your size and setup, that could be a stock register, accounting software, an inventory system or an integrated enterprise resource planning (ERP) system.

The important test is whether your records can be followed from one transaction to another. For example, a purchase should be supported by a supplier invoice or other relevant document, recorded as stock received, and reflected in your stock balance. A sale should match an eTIMS invoice and reduce the relevant quantity.

For more background on eTIMS setup and common compliance gaps, read our guides to eTIMS registration in Kenya and eTIMS compliance mistakes businesses can fix.

Which stock movements must your business record?

KRA’s notice covers goods that are received, purchased, sold, transferred, returned, adjusted or otherwise disposed of in the course of business. Build your process around every movement, not only purchases and sales.

Make sure your team can record:

  • Goods received: Record deliveries when they arrive, and check them against purchase documents and delivery notes.
  • Goods purchased: Capture local purchases and imports in the right stock records.
  • Goods sold: Match invoiced sales to the items and quantities that leave stock.
  • Transfers: Record stock moved between branches, locations or storage areas, including where the business retains ownership.
  • Returns: Record goods returned by customers and goods sent back to suppliers.
  • Adjustments: Explain corrections such as damaged, expired, missing or incorrectly counted items.
  • Other disposals: Record goods used internally, written off or otherwise removed from stock, with a reason and supporting record.

A consistent product description and unit of measure also help. If the invoice calls an item one thing and the stock register calls it something else, your team may struggle to match the records later.

January 2027 is the expected full implementation period

KRA expects full implementation of the stock module in January 2027. That gives businesses a reason to prepare ahead of time rather than waiting for the module to be fully implemented or for enforcement activity to begin.

KRA’s public notice announced consultation forums beginning in September 2026, and stakeholder discussions have raised practical questions about ERP integration, manufacturing and conversion processes, and stock variances. The exact technical instructions for these areas remain important to watch for in KRA announcements.

Use the months before implementation to understand your current process. You can identify missing records, tidy product lists and test whether your invoice data and stock records can be reconciled. That preparation can reduce last-minute disruption and give your team time to address system gaps.

Common stock-record gaps to fix before year-end

Small gaps can become difficult to explain when they build up over several months. Review for these common problems:

  • Invoicing goods before recording them as received: A sale may appear in eTIMS while the related delivery is missing from your stock records. Record incoming goods promptly and retain the supplier and delivery documents.
  • Missing branch transfers: If one branch sends goods to another without recording the transfer, one location may appear short while another appears to have extra stock. Record both sides of the movement.
  • Unrecorded returns and adjustments: A return or write-off changes stock. If the change is not recorded, the closing quantity may no longer make sense against purchases and sales.
  • Unexplained stock variances: A variance is the difference between the stock your records say you have and what you count physically. Count the items, check transaction entries and document the reason for any remaining difference.

How to run a practical month-end stock reconciliation

A reconciliation is a regular check that two sets of records agree, followed by a review of any differences. Set aside time each month to compare your stock movement records with your eTIMS invoices and purchase documents.

  1. Confirm opening stock. Start with the closing stock balance from the previous month. Check that the figure is carried forward correctly.
  2. Add purchases and receipts. Match goods received to supplier invoices, delivery notes and other relevant purchase records. Follow up on deliveries that appear in one record but not another.
  3. Subtract invoiced sales. Compare eTIMS sales with stock issued. Check item descriptions and quantities, not only total values.
  4. Record returns and transfers. Confirm that customer returns, supplier returns and branch movements have been recorded in the correct period and location.
  5. Review adjustments and disposals. Check that each change has a reason, date, quantity and supporting note or document.
  6. Check closing stock. Compare the resulting balance with a physical count or another reliable stock check.
  7. Investigate and document differences. Look for timing issues, missed entries, incorrect quantities or other explainable causes. Keep a note of what you checked, what you corrected and why.

Keep the routine simple enough that your team will complete it every month. A spreadsheet and manual checks may suit a smaller business; a larger operation may benefit from connected inventory and accounting systems. The right approach is the one you can maintain accurately.

If you already use an ERP or cloud accounting system, ask your provider how it records stock movements and connects with eTIMS. Zidika’s accounting automation services can help you review how your invoicing, inventory and accounting records fit together.

What is still uncertain?

KRA is addressing technical issues raised in stakeholder forums. Businesses should keep an eye on official updates rather than assume all implementation details have been finalised.

In particular, watch for further guidance on:

  • ERP integration: How different business systems will connect with the stock module.
  • Manufacturing and conversions: How to record goods that are made, assembled or changed from one form into another.
  • Stock variances: How differences between recorded stock and physical counts should be handled.
  • Implementation instructions: Any further details KRA issues about system use and rollout.

For updates, check KRA’s stock management functionality guidance and public notices. Keep a record of your current process and any system issues you encounter; that will help your team respond to updated instructions.

Your year-end eTIMS stock checklist

Use this checklist to identify what to fix before the module’s expected full implementation:

  • Confirm that you record goods received and purchased, including imports.
  • Match invoiced sales to stock issued and quantities sold.
  • Record branch and warehouse transfers when they happen.
  • Capture customer returns and goods returned to suppliers.
  • Document adjustments, damage, expiry and other disposals.
  • Review product descriptions, stock codes and units of measure for consistency.
  • Reconcile opening stock, movements and closing stock each month.
  • Investigate and document differences between records and physical counts.
  • Check whether your accounting or ERP system can support the required records.
  • Follow KRA announcements on integration, manufacturing conversions and variances.

Accurate stock records help you keep invoices, books and tax reporting aligned. They also make it easier to understand what is happening in your business.

Get support with eTIMS and stock records

Preparing for stock tracking does not have to mean replacing every system at once. Start with a clear record of movements, a regular reconciliation and a plan to close the gaps you find.

We help businesses organise their records and review their eTIMS and tax processes through our Tax & Compliance services. If you need professional bookkeeping, bookkeeping services in Nairobi, accounting services in Kenya or advice from a tax consultant in Kenya, we’ll help you set up a practical process suited to your business.

With consistent records, you can approach the new functionality with better visibility and confidence. Let’s talk.