Performing a Physical Inventory

A physical inventory is the process of manually counting all inventory for a specific warehouse or location. Upon completion of the actual physical inventory, all numbers are then recorded, and discrepancies are identified and explained. This process provides a factual valuation of inventory.

Note:  If you only need to do a partial inventory of selected items, or you cannot afford to have your entire system frozen while you perform inventory, you can do a cycle count instead.

For a description of the differences between a cycle count and a physical inventory, see Differences Between Cycle Counts and Physical Inventories.

To perform a physical inventory, use the following procedures:

  1. "Freeze" the inventory.
    Note:  Before a physical inventory can begin, the inventory status must be frozen. While performing the inventory, all inventory items for the selected warehouse are unavailable until the inventory is complete. Once you freeze inventory, you cannot unfreeze it until the physical inventory is complete for this warehouse.

    To freeze the inventory:

    • On the Freeze/Unfreeze Utility, select a warehouse from the list.
    • Select the Physical Inventory In Process check box.
    • Click Process.
  2. Set the control parameters for the inventory tags and/or sheets on the Set Tag Sheet Controls form..
  3. Load the physical inventory records with the Load Physical Inventory Records form.
  4. Use the Print Inventory Sheets or Print Inventory Tags forms to print inventory tags and/or sheets for your inventory staff to use.
  5. Record the counted quantities into the system:
    • From tags using the Input/Update Tags form.
    • From sheets using the Input/Update Sheets form.
    • Open the appropriate form.
    • In the grid, enter the counted quantities for each item.
    • If stock locations do not exist for inventory items, add them.

    To enter a replacement tag/sheet number for an item/lot/location combination while the inventory is frozen, on the Input/Update Tags form or the Input/Update Sheets form, select Actions > New. You can also add a few records with blank sheet/tag numbers when needed without executing the printing process.

    Verify the Revision number for the lot, if any, on the Input/Update Tags form or the Input/Update Sheets form. You cannot receive a newer revision of the same item into an existing lot/location. However, during physical inventory, if an item is found and added to a lot, a newer revision number of the item is allowed. When an item is added on a new record, the Revision field is automatically populated with the item revision number, but this value can be updated. In this case, add the new revision number before you specify the lot.

  6. Post the inventory quantities.

    For more information, including the procedure and recommended pre-posting checks, see Posting Physical Inventory Quantities.

  7. Unfreeze the inventory:
    • Verify that the correct warehouse is selected on the Freeze/Unfreeze Utility.
    • Clear the Physical Inventory In Process check box.
    • Click Process.
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