About Physical Inventories

When beginning to use the system, you might want to run the Rebalance Item Quantity On-Hand utility to ensure that all inventory transactions are being processed correctly, because an actual count of all items in inventory is necessary. This count is reconciled with the item location book count.

If all receipts and disbursements are recorded properly, the physical count equals the book count. If not, some part of the system must correct its procedures for tracking inventory.

Variance reports are available to help you quickly spot the variances, so that corrective actions can be determined.

The physical inventory system helps take an actual count of the items on hand at each location by printing tags/sheets to record the on-hand count of each item in inventory. This count is then entered into the physical inventory system and later compared to the item location's on-hand quantity. After editing and approval, the actual counts are posted to the item location and to the Items record. This posting adjusts both the count and the value of the inventory.

The physical inventory function is done at the warehouse level. Physical inventory can take place at the same time for multiple warehouses.

Note: An alternate way to help keep track of inventory is the cycle count.