Physical Count
- Stephen Juliano (Unlicensed)
- Stephen Juliano
- Colleen Juliano
Overview
One necessary evil for all companies is the physical count, at least once a year the activity of counting the physical inventory on the floor to make sure it matches the books must be completed. In TRX Enterprise the physical counts are used to ensure that the actual quantities of inventory items in a warehouse stocking location(s) matches what TRX Enterprise says is in your database.
Detail
Physical counts are also performed as part of the implementation of TRX Enterprise to enter beginning balances of items. Items to be counted can be selected based on warehouse location, manufacturer item category or class, count code, building, room, row, shelf or bin location. The physical count process involves the following steps:
Freezing the Inventory - Freezing the inventory is the first step. It is used to record the current on hand quantity of the items that will be counted. It is important that procedures be in place at the warehouse location to also record any receipts or issues of the items that have been frozen and to include the transactions as part of the count. This will not process will not stop transactions from occurring it only takes a snap shot in time to give you a reference point.
Printing Count Sheets - This prints the items being counted in the order in which they will be counted.
Counting the Inventory - Employees or contract workers actually count and record the quantities of each item.
Entering the Count - The count of each item is entered. This is compared with the quantity of the item that was frozen to determine any overage or shortage of the item.
Physical Count Verification Report - This report prints the items that were frozen for the count, the actual count that was entered and any discrepancies that will cause changes in the inventory when the Complete Count Processing is done. Many will print this report out and recount any items that seem to have a large difference.
Completing the Count - This process produces a report showing any discrepancies between the quantity of items frozen and the quantity actually counted and makes inventory transactions so that the quantity on hand will match the quantity that is physical stocked at the warehouse location. Any GL difference will be stored in the Physical count variance GL account.
One necessary evil for all companies is the physical count, at least once a year the activity of counting the physical inventory on the floor to make sure it matches the books must be completed. In TRX Enterprise the physical counts are used to ensure that the actual quantities of inventory items in a warehouse stocking location(s) matches what TRX Enterprise says is in your database.
Physical counts are also performed as part of the implementation of TRX Enterprise to enter beginning balances of items. Items to be counted can be selected based on warehouse location, manufacturer item category or class, count code, building, room, row, shelf or bin location. The physical count process involves the following steps:
Freezing the Inventory - Freezing the inventory is the first step. It is used to record the current on hand quantity of the items that will be counted. It is important that procedures be in place at the warehouse location to also record any receipts or issues of the items that have been frozen and to include the transactions as part of the count. This will not process will not stop transactions from occurring it only takes a snap shot in time to give you a reference point.
Printing Count Sheets - This prints the items being counted in the order in which they will be counted.
Counting the Inventory - Employees or contract workers actually count and record the quantities of each item.
Entering the Count - The count of each item is entered. This is compared with the quantity of the item that was frozen to determine any overage or shortage of the item.
Physical Count Verification Report - This report prints the items that were frozen for the count, the actual count that was entered and any discrepancies that will cause changes in the inventory when the Complete Count Processing is done. Many will print this report out and recount any items that seem to have a large difference.
Completing the Count - This process produces a report showing any discrepancies between the quantity of items frozen and the quantity actually counted and makes inventory transactions so that the quantity on hand will match the quantity that is physical stocked at the warehouse location. Any GL difference will be stored in the Physical count variance GL account.
Freeze Inventory
Freezing inventory is the first step of the physical count process. Items to be frozen for a count can be selected based on count codes, category, class, warehouse location or location within a warehouse such as building, room, row, shelf, or bin.
Note: Once a count is frozen transactions can still be made, but the starting count that you froze will not change so you will to have a means of incorporating all transactions made during your freeze into your final count. So if you freeze with four widgets in stock and you count four, but you then sell one before you unfreeze your count. Your new count will need to be adjusted to three.
Freeze Date – this is a computer generated date that that marks the time that inventory is frozen
Starting and Ending count Code – You can enter a count code or a range of count codes to this selection screen. Count codes are codes that the user creates and assigns to items to create quick and easy small batch "Cycle Counts". Count codes are assigned to inventory items on the warehouse tab of item setup screen.
Cycle counting is the process of dicing up your inventory into small groups that can be frozen individually and counted quickly. It is common practice for many users to assign cycle count codes to their items that have the most volume and to count them on a regular basis to stay on top of any unforeseen inventory issues (shrinkage, missed receipts). Cycle counts are usually small enough groups that one or two people can get a full count in ten to fifteen minutes.
Starting and Ending Category – This selection screen will accept inventory categories or a range of inventory categories.
Starting and Ending Class - This selection screen will accept inventory classes or a range of inventory classes.
Starting and Ending Warehouse locations – Physical counts can be done by individual warehouses or all of them if needed.
Inventory Location – this selection screen will allow you to choose inventory locations as a selection item so you can add the Building, Room Bin Row Shelf if needed.
Include Non-stocked items – this check box should never need to be checked for food service industry users
After filling out this screen and pressing the start icon TRX will make sure that the items that you have chosen to freeze have not already been frozen. If they have you will receive a message and will have to unfreeze them the old items before moving forward.
If items have been frozen incorrectly, inventory can be unfrozen without making changes by simply performing the Complete Count Process without entering any counts. Items that are not counted or no count entry is made are not modified during the complete count process.
After freezing the inventory, counts sheets should be printed if needed and they can be printed as part of the Physical Count process.
Print Count Sheets
After freezing the inventory for a physical count, count sheets are usually printed. Workers who actually physically count the items use these sheets. There is a place next to each item on the sheet to record the actual quantity found in the warehouse during the count. After counting, these sheets are used to enter the physical counts in the system
Count sheets can be printed for only those items that had a quantity on hand at the time the Inventory was frozen for the physical count by checking the Exclude Zero Quantity checkbox. When the inventory is frozen for counting, all active items that matched the criteria are frozen regardless of the quantity on hand. If many items have a zero quantity and are not likely to be found on hand during the physical count, the count sheets report can print a large number of pages. By selecting to exclude these items, there are fewer pages to the count sheets.
Note: It is important to note that TRX will count by the standard unit of measure for that item you must instruct counters to define other UOMs.
Freeze Date – this is a computer generated date that that marks the time that inventory is frozen
Starting and Ending count Code – You can enter a count code or a range of count codes to this selection screen. Count codes are codes that the user creates and assigns to items to create quick and easy small batch "Cycle Counts".
Starting and Ending Category – This selection screen will accept inventory categories or a range of inventory categories.
Starting and Ending Class - This selection screen will accept inventory classes or a range of inventory classes.
Starting and Ending Warehouse locations – Physical counts can be done by individual warehouses or all of them if needed.
Inventory Location – this selection screen will allow you to choose inventory locations as a selection item so you can add the Building, Room Bin Row Shelf if needed.
Exclude Zero Quantity items – If many items have a zero quantity and are not likely to be found on hand during the physical count, the count sheets report can print a large number of pages. By selecting to exclude these items, there are fewer pages to the count sheets.
Note: It must be noted, that when persons counting inventory find an item that is not on the count sheet, that it is written down so that when the counts are entered, they will be accurate.
Note: Printing count sheets is an optional procedure it is not mandatory for completing physical count.
Note: there is a setup function in Inventory to include or exclude freeze counts on Physical count sheets.
Enter Physical Counts
After the counts sheets have been printed and the items actually counted, the quantity counted must be entered. The counts need to be compared to the quantity frozen to determine any changes necessary in inventory so that the quantity on hand in TRX Enterprise matches the actual physical on hand quantity.
There are several ways of entering the physical counts. Two different screens are provided in TRX Enterprise. One displays the items in the same order of the count sheets and only the quantity for each item needs to be entered. The other screen does not display the items and the item number along with the quantity must be entered. This screen can be useful if the count sheet used has bar codes for the items printed.
Counts can also be uploaded from a text file. The text file can be created by any program or hand held scanning device that was used as part of the physical count. To choose between the two screens, the one that displays items and the one in which the item numbers must be entered, use the checkbox on the Inventory Setup screen.
When this checkbox is checked, the screen with the item numbers is used and only the quantity needs to be entered.
Using the Count Entry Screen (Query Items)
The first step in entering counts is to select which items will be displayed on the screen on which to enter the quantities. The first window is an item selection window on which a range of items is selected. The second window then displays the items in the range and the actual count quantities are entered.
Freeze Date – this is a computer generated date that that marks the time that inventory is frozen
Starting and Ending count Code – You can enter a count code or a range of count codes to this selection screen. Count codes are codes that the user creates and assigns to items to create quick and easy small batch "Cycle Counts".
Starting and Ending Category – This selection screen will accept inventory categories or a range of inventory categories.
Starting and Ending Class - This selection screen will accept inventory classes or a range of inventory classes.
Starting and Ending Warehouse locations – Physical counts can be done by individual warehouses or all of them if needed.
Inventory Location – this selection screen will allow you to choose inventory locations as a selection item so you can add the Building, Room Bin Row Shelf if needed.
Exclude Zero Quantity items – If many items have a zero quantity and are not likely to be found on hand during the physical count, the count sheets report can print a large number of pages. By selecting to exclude these items, there are fewer pages to the count sheets.
After clicking start, the main count entry screen is displayed along with all of the selected items. The items are listed in the same order as the count sheets to make the entry process easier. Enter the actual count quantity of each item. The Counted By and Tag number fields are optional. The count date is automatically filled in using the Count Date that was entered on the Start window. You can change the count date for specific items by clicking on the date and changing it, or using shift-tab from the Count Quantity field.
After entering all of the counts, simply click on the exit button on the toolbar.
Note: Counts will remain in the system until the Complete Count Processing is performed. This allows item counts to be entered over a period of time. You can return to the screen and continue entering counts with all of the previous counts displayed.
You can use the white Item search box at the top of the Item column to search for specific items. Simply enter part of the item number and press TAB. All items that match are displayed. To display the whole list again, remove the item number you entered in the Item search box and press TAB again.
Importing Counts from a File
Data collected in hand held scanners, such as a scan pal, could be downloaded into the counts. The file format needs to be a simple text (.txt) file with two fields, item number and count quantity.
The fields in the file can be delimited by either a TAB or a comma. The download process will automatically determine which delimiter was used. Each record must be separated by a carriage return and display on a separate line.
Use of the scanner and retrieving the data into a text file should be covered in the manual for the scanner.
After using the Start window of the Enter Physical Counts screen, click on the Import button at the top of the screen. Select the file to be imported from the standard window open dialog box. The data will be imported.
The count quantities will be added to any existing count entered for the item. Any items in the file that are not actual inventory items are written to a .bad file. The .bad file can be found in the same directory as the original file.
After entering the items via file import you must tab through each line to trigger the add serial number function. Failure to do this will slow down the unfreezing process considerably as you will have to add them as you go. If we find a missing serial we display an alert then highlight all items missing a serial with a raised bevel effect.
Physical Count Verification
The Physical Count Verification report is used to verify the count data that was entered. Use the report to see which inventory items will be adjusted due to the freeze quantity and the count quantity being different. By default the report only prints counted items that have a discrepancy noted. The report can be printed for any range of frozen items. This report is also used to verify the accuracy of the counts that were entered.
The Add No Counts button will create a count entry of zero for each item that did not have any count entry made. If no count entry was made for an item, it can be assumed that there is no on hand quantity of the item and therefore the count quantity should be zero.
Freeze Date – this is a computer generated date that that marks the time that inventory is frozen
Starting and Ending count Code – You can enter a count code or a range of count codes to this selection screen. Count codes are codes that the user creates and assigns to items to create quick and easy small batch "Cycle Counts".
Starting and Ending Category – This selection screen will accept inventory categories or a range of inventory categories.
Starting and Ending Class - This selection screen will accept inventory classes or a range of inventory classes.
Starting and Ending Warehouse locations – Physical counts can be done by individual warehouses or all of them if needed.
Inventory Location – this selection screen will allow you to choose inventory locations as a selection item so you can add the Building, Room Bin Row Shelf if needed.
Add No Counts - The Add No Counts button will create a count entry of zero for each item that did not have any count entry made. If no count entry was made for an item, it can be assumed that there is no on hand quantity of the item and therefore the count quantity should be zero.
Note: It is very important you understand what the "Add No Counts" icon does before using it.
Print Exceptions only – Checking this box will make the report only print out items that have had an inventory change. This report is good for pointing out what may need to be double-checked.
Complete Count Processing
The Complete Count Processing function is the final step in the physical count process. This screen will unfreeze inventory as well as make adjusting entries for counted items that have a counted quantity that is different from the freeze quantity. The range of items frozen to be completed can be specified using the same criteria as both the freeze and enter count quantities steps. No report is printed during this process. For a report on the counts that were entered, use the Physical Count Verification report.
Starting and Ending count Code – You can enter a count code or a range of count codes to this selection screen. Count codes are codes that the user creates and assigns to items to create quick and easy small batch "Cycle Counts".
Starting and Ending Category – This selection screen will accept inventory categories or a range of inventory categories.
Starting and Ending Class - This selection screen will accept inventory classes or a range of inventory classes.
Starting and Ending Warehouse locations – Physical counts can be done by individual warehouses or all of them if needed.
Inventory Location – this selection screen will allow you to choose inventory locations as a selection item so you can add the Building, Room Bin Row Shelf if needed.
Pressing the process transactions icon will unfreeze the inventory make the corresponding GL entry and adjust the inventory counts accordingly.
Defrost Physical Count
If a Physical Count was started by mistake, you may want to unfreeze the items without updating any counts. To do so, we will need to Defrost the Physical Count.
Pull up your Physical Count
INV>Physical Count
Go under “Enter/Process Counts” tab
Enter your Freeze Code or hit F9 to find
Hit enter to load it
Defrost Physical Count
Hit the Defrost button