Welcome to the topic on physical inventory.

In this topic, we go through the process steps for counting inventory.

Imagine that:

Your company needs to have an accurate count of the stock physically in the company warehouses.

The company uses perpetual inventory which tracks the receipt and use of inventory and calculates thequantity on hand.

The company wants a physical count of inventory for financial and tax reasons, so they have set up anperiodic counts linked to cycle count recommendations.

If the physical count reveals any discrepancies from the quantity recorded in the system, the quantitydifference is posted.

Inventory Counting is a recurrent activity in every item-based business. Matching the actual itemsavailability and the quantities saved in the system is crucial for inventory management.

You can set up inventory cycles with recommendations for periodic counts to be triggered annually,monthly, weekly or even daily.

The first step in managing physical inventory is setting up the cycle counts.

Cycle counting is the process of counting inventory items throughout the year based on a schedule, sothat all items are counted at least once a year. Generally the primary focus is on items that move morefrequently, with less attention given to items that move less frequently.

First you set up the inventory cycles you need. You can set cycles for different intervals.

Then set up the cycle count determination to get recommendations.

You can define your inventory cycle counts by item group or, if you are using bin locationmanagement, by warehouse sub-levels.

Once you have made these settings, you can then go into the inventory cycle count definition to set upalerts for the item groups or warehouse sublevels that need counting.

When you receive the alert you can choose which of the recommended items you wish to count at thattime.

Once items are selected, you can freeze the items for counting. Freezing an item ensures that the itemin the selected warehouse or bin is blocked from any business inventory transaction until the item hasbeen counted and relevant postings made.

When the inventory document is ready, you then print a count sheet for the stocktakers to fill out. Youcan choose to include or exclude a display of the quantities recorded by the system.

During the counting, you use a centralized inventory counting document to record and manage theinventory count process.

The last step is to post any quantity differences that the stock takers detect. From the inventorycounting document, you can copy the differences into an inventory posting document.

Multiple stock takers can count the inventory within same the area.

For example, two employees can count the stock for the items in one section of a warehouse.

After counting, they each enter their results.

You can then compare the results of the two stock takers.

The Inventory Counting Transactions Report allows you to view the results from inventory counts withdetails on items counted, where and when they were counted, whether any discrepancies were notedand whether any correction postings were made. You can link from this report directly into theinventory counting and inventory posting documents.

An inventory counting recommendation & risk assessment dashboard report supports you in analyzingthe risk for inventory counting per warehouse. The risk assessment is defined per item per warehouseusing a number of pre-defined parameters such as ‘days since last inventory count’, ‘transactionvolume’’ or ‘item value’ for example.

Additionally all the inventory counting documents are viewable in the Open Items list along with sales,purchasing and inventory goods movement documents.

These information from these reports supports a dynamic and transparent counting and inventoryposting process.

You have the ability to really analyze quantities and differences while the inventory count is inprocess, and has been completed, and to compare differences between two inventory takers.

Inventory Counting is done periodically in every item-based business to match the actual physicalcount to the quantities saved in the system.

You can set up inventory cycles with recommendations for periodic counts to be triggered annually,monthly, weekly or even daily.

The cycles can be tied to warehouses, warehouse sublevels, bin locations, item groups or items.

Alerts remind you about items that are due for inventory taking.

The inventory counting document coordinates counting by multiple stock takers, records the results,manages the process and allows you to copy any differences into inventory posting documents.

You have completed the topic for physical inventory. Thank you for your time!