Physical Inventory Procedure

Use the Physical Inventory routines to perform a physical count of the inventory at your facilities and then as a final step in the process to update the computer on-hand quantities if the computer count and the physical count differ.

The Physical Inventory routines are flexible and may be run for the entire inventory or for specific areas within your inventory.  For example, you can run the process for a specific location, bin or cycle code, allowing your company to perform the physical count in a method that works best.  Or, you can create the work file for the entire inventory and then print count sheets, do the count, enter the physical counts in the edit work file and run the variance report for a specific location or cycle code.  For that reason, it is important to carefully choose the ranges for each step in the process so that the desired items are included in each step.

Below is an overview of the steps involved.

1.  Physical Inventory Create Work File - Creates a work file that contains the computer count of each inventory item as well as fields for entering the physical count so that the inventory can be verified.  The work file information is used by the system to determine the variance between the computer count and the physical count.  The Work File information does not adjust the actual inventory counts until it is updated through the Physical Inventory Work File Post routine.  The Work File can be created for the entire inventory or for specific areas.  For example, you can select to build a Physical Inventory Work File for a specified location, bin or cycle code.

2.  Physical Inventory Print Count Sheets Instructions - Prints Physical Inventory Count worksheets for counting the inventory in an orderly and efficient manner.  You can choose a range of items, locations, product categories and cycle codes.  The Count Sheets can be sorted and printed by item, location and bin.

3.  Physical Inventory Edit Work File - Use this routine to enter the physical counts for the items after the items have been counted.  After the physical inventory item counts are entered here, then the Variance report can be used to determine the differences between the physical and the system item counts.

4.  Physical Inventory Variance Report Instructions - Lists the differences between item quantities stored in the system and actual physical counts.  You can choose the range of items to include and choose how the report should be sorted.

1. • Item costs used in the variance calculations are pulled from different fields depending on how the Inventory Settings Cost Based On option is set.  The Cost Based On options are 0=Average cost, 1=Standard cost, 2=Last cost, 4=Average(LIFO), or 5=Average(FIFO).

   • Items with a zero quantity in the physical count field will not report a variance as it can not be calculated.  In this case, N/A displays instead.

5.  Physical Inventory Post Work File - Finalizes the Physical count process by updating the quantities of each item with the physical count amount that reflect the verified quantities of the items.  The post will update the system on-hand quantity to match the physical count quantity.  Generally, it is important to choose the same ranges here as were chosen when the count sheets were printed.

Notes:

1. • The Physical Inventory Post report rounds values to two decimal places.

   • Item costs used in the variance calculations are pulled from different fields depending on how the Inventory Parameters Cost Based On option is set.  The Cost Based On options are 0=Average cost, 1=Standard cost, 2=Last cost, 4=Average(LIFO), or 5=Average(FIFO).  It is important to note that item costs are not updated during this routine, only quantities.

   • The Post Work File printout will list all items that are updated.  It looks similar to the Physical Inventory Variance Report.