Most organizations conduct a full physical inventory count for each warehouse at least once a year. A full physical inventory greatly improves the accuracy of available data, but it disrupts business processes and can be very costly.
Acumatica ERP provides you with the functionality to support physical counts for full inventory, as well as other alternatives. These alternatives include cycle counting, whereby all items are assigned to specific cycles and separate physical counts are performed for each cycle’s items at an appropriate frequency. Because counting by alternate methods can be conducted more quickly, these methods are less disruptive to daily operations.
What Is a Physical Inventory Count?
A physical inventory count is a structured approach to counting a company’s stock where staff uses a predetermined method to count the goods. Companies schedule a physical inventory count at the end of a reporting period.
Benefits of Doing a Physical Inventory Count
Physical inventory counts are an essential part of keeping inventory records accurate and current. Up to date inventory records provide for better forecasts of sales and purchases and ensures you always have the right amount of product on hand.
Performing physical inventory benefits your customers, and accurate physical inventory counts are a necessity. No end-user, be it consumer, reseller, or wholesaler, wants to deal with uncertain stock levels in this modern day of instant gratification. Customer satisfaction is paramount. Updated inventory levels ensure that you can fulfill your orders for your customers promptly or tell them when it can be fulfilled.
Another benefit of physically counting your inventory is to ensure you understand and can plan for loss. Loss can come from theft or breakage. Every day that an item remains in inventory, its value decreases. As the value lessens, the risks of the cost to stock the item outweighing its value becomes very real.
Performing physical inventories improves your profits overall. You can classify certain products in your warehouse as obsolete inventory, which is a valuable method for identifying which items to market and merchandise for a quick sale. This process also reduces the liability and break even, at least, for questionable products.
Tips & Best Practices When Preparing for a Physical Count
The best way to perform a successful inventory count is through detailed planning. Using a comprehensive written policy and instructions decrease unknowns and streamline a physical inventory count.
Other tips to improve your staff’s counting accuracy include:
- Using scanners or other stock counting technology
- Selecting staff who are attentive counters
- Addressing discrepancies immediately
- Performing a mock count during the planning
- Ensuring the cost of the item counted is not displayed during the count.
- Stopping operations when performing a complete physical inventory
- Ensuring that staff on-site during a full physical inventory are only there for the count
- Securing the stock area on the day of the inventory
- Using inventory software
Update: Inventory counting tips during COVID-19
We understand that you may be reading while the world is going through the Coronavirus pandemic.
Maybe you’re in lockdown mode but still want to make sure that you have a good handle on your stock levels. Perhaps your state or country’s restrictions are easing up and you’re preparing to reopen your store.
Whatever the case, here are a few tips to stay safe and healthy when counting your products.
If possible, count products on your own or with someone in your household
Limiting contact with people outside your home is one of the best things you can do to avoid potentially catching or spreading the virus.
So see if you can conduct physical stock counts on your own, or with a member of your household if you have a larger catalog.
Depending on how many products you have, you may need to break up your counting sessions.
If you must bring in your employees, practice physical distancing
Need to bring in your staff? Take steps to protect yourself and them. Wear personal protective equipment such as masks and gloves when you’re in person.
And be sure to keep a safe distance — at least 6 feet apart — when counting products. You can do this by assigning different areas in which you and your team can count products. For example, you can have one team member count items at the front of the store while you stay in the stock room.
Another option is to schedule your counts in shifts, so you’re not in the store at the same time. You can, for instance, assign an employee to come in the morning, while you handle inventory responsibilities in the afternoon.
Use devices that limit physical contact
The fewer items or devices you touch, the better. Have just one device per person when counting products. So instead of using a clipboard plus pen and paper, opt to use a stock counting app like Scanner, which people can download to their phones — no extra devices required.
Also, try to limit the products that you touch. Whenever possible, opt to scan an item’s barcode without picking it up from the shelf.
Looking for more information on physical inventory? Schedule a free, customized live demo today!