How to Create and Enter the Physical Count

How to Create and Enter the Physical Count

PURPOSE:
To “post to actual” the physical count of manufactured, regular, and GRN manufactured items. For example, if 5-gallons of Roundup chemical is keyed into the amount counted field, it will change the current on-hand quantity to 5-gallons.  

The physical count process is a periodic procedure that may be completed as needed. Your company may adopt a physical count schedule that is completed on a daily, weekly, monthly, or annual rotating basis.  This schedule may vary due to different product types.  For example, a high-volume product such as fertilizer may be counted on a weekly basis where as a slower moving product such as lawn equipment may be counted yearly.

To maintain the integrity of the physical count and to facilitate re-counts where necessary, stop all movement of merchandise during the physical count process. To prevent transaction entry, the software "locks" all menu options that affect the Quantity On Hand, Average Unit Cost, and Value fields. Importing documents, such as invoices or manufacturing’s, that would affect the above fields should also be stopped until after physical count is completed.

PROCESS:

1. Determine cutoff date. (for example: July 31^st)

2. Enter all transactions that affect Quantity on Hand, Average Cost, and Value fields for all transactions up to July 31^st

3. On July 31^st, run Cost Adjustment Procedure.

4. Build Physical Count Work File in INV > Inventory > Physical Count > Build Physical Count Work file

   1. Note that you can limit this work file to several filters.

   2. Any item/ product category/ location code included in the filters will be locked to data entry until AFTER you have updated or deleted the work file.

   3. A onetime report is created when the work file is built.

      1. Save this to the spool, as you will not be given another chance to create this report.

      2. This report will hold all the items to be counted, their book quantity (if you choose to print this) and a blank for the people taking the count to write in their amounts.

5. Enter Physical Counts in INV > Inventory > Physical Count > Enter item > enter count

   1. Then next inventory item will pop up to count entry in the sequence it is listed by in the count worksheet.

6. After data is entered, print out the Physical Count Report to very your data entry in INV > Inventory > Physical Count > Print Physical Count report.

   1. This report can be run at any time to check on the progress of the count entry.

7. If you have “unlocked” the inventory so that data entry can continue past July 31^st, using our example, then a Cost Adjustment will need to be run.

   1. For example, if inventory transactions were keyed for August 1^st through the 5^th, before you update the count, then a cost adjustment needs to be run

   2. Post the cost adjustment to the current date which in this example would be August 5^th.

8. Generate the Over/Short Report in INV > Inventory > Physical Count > Generate Over/Short Report

   1. This report can be run without updating the on-hand quantities to see what it will affect, but once you are sure of all your entries, you will run this report to change the quantities and values on hand to match your physical count.

   2. This will create an entry in the detail that will flow to the ledger affecting the inventory asset and cost of goods sold.

   3. This function will also delete the workfile & re-open inventory for entry.

   4. Post this entry either on your cutoff date or the current accounting date, depending on your desired ledger affect.

9. Once the over/short entries are posted, another cost adjustment procedure should be run to adjust for any previously negative on-hand item that is now positive. Again, posted to current accounting date.