A dissertation submitted to Dar es salaam Campus College in Partial Fulfillment of the Requirements for the Award of the Degree of Masters of Science in Procurement and Supply Chain Management (MSc. PSCM) of Mzumbe University.Stocktaking is a very important procedure in many organizations. Most of the organizations must prepare financial statements at the end of every financial year. Thus by definition stocktaking is the process of counting, weighing and measuring the quantity of stock balances and recording of items being counted. The main objective of this study is to find out the Ineffectiveness of Stocktaking which can cause costs as well as improper and unplanned financial statements in an organization. The topic of this study was An Impact of Ineffectiveness of Stocktaking on the Enterprise Resource Planning (ERP) at Medical Stores Department (MSD), headquarters in Dar es salaam, Tanzania. It is the study requirement of master program at Mzumbe University. Therefore, in summary, this report will present the areas where the organization annual stocktaking complied with annual financial statement and the points at which did not comply in the proceedings of stock balances and recording of items being counted as well the study will present possible reasons behind that hinder its compliance and the possible solution to overcome the same in future. By using various data collection method including questionnaire, interview, observation and documents the researcher was able to collect relevant data and reach into conclusion. To get relevant data of the study, questionnaires, interview, observation and review of records from different sources were applied. The major findings in this study was that, mismatch between the figures of opening and closing stock are likely to be used in the final accounts, which culminates to wrong trading results of the firm. The study reveals various weaknesses that can be termed as challenges on achievement of planed and proper financial statement.