Physical Inventory Tips

Many organizations perform an annual, or semiannual, physical inventory. The end of the year is usually the time when organizations, that have inventory, start thinking about and preparing for a physical inventory. One of the tools at your disposal to handle this process, is the Stock Count Schedule in Dynamics GP. As a mobile barcode solution, specifically for inventory and GP, we would like to share some of tips to make your counts and reconciliation as painless as possible (beyond utilizing PanatrackerGP to make the count entry more efficient).

First, we will discuss how the Stock Count Schedule setup works. You can create one master schedule, or you can create a number of schedules. The option to define the Site is available, or you can set up your schedule to include multiple sites. If you are using multiple-bin tracking within Dynamics GP, you will need to include the bins in addition to the site; GP makes this a bit easier with the ability to complete a 'mass add'. There are a number of options for a mass add; including ABC Code, Item Class, Generic Description, and Bin. A range can be defined for any one of these options.

Only one item-site-bin combination can be included as part of a 'started' count; so, if you are setting up several scheduled, be cautious not to duplicate. Once your count is saved, and you are ready to complete the physical activity of the count, you will 'start' the count. This captures the On Hand quantities, within GP, that the count will be verified against. You will also be able to print out count sheets, or the count schedule will be available to use within PanatrackerGP to capture and submit the counts back to GP's Stock Count Entry.

If you will have several count team members, it is important to define the physical areas they will be assigned to count. You may also want to consider utilizing visual queues, such as colored stickers, which can be applied to the inventory when the count is completed. If you don’t use the formal multiple bin tracking in GP, you can enable a Flex Field on the Stock Count and still capture the count of each section. If you use multiple-bin tracking in GP, you may want to consider creating multiple count schedules based on bin ranges. This can make the reconciliation process a bit easier.

Ideally, all inventory activities should be stopped during the physical count activities. The variance to the count is the captured GP quantity at the time the count is started. Physically moving, taking out, or adding inventory after the start of the count, until it's completion, can generate false discrepancies. You may end up recording duplicate additions or reduction to your inventory. If you do need to handle inventory, get the transactions recorded and saved in a batch (do not post them). During the reconciliation process, access to unposted transactions is available to account for discrepancies. Variance quantities can be adjusted manually prior to processing the Stock Count in GP. If you don't have the luxury of freezing inventory activities, you may also want to consider the Blue Moon Quality Count as an option. PanatrackerGP integrates with this solution, in addition to the GP Stock Count, to assist in efficiently capturing accurate counts.

Before you start your count, it is recommended that all pending inventory transactions are posted within GP. This includes adjustments and site transfers. You may have allocations on sales transactions and manufacturing orders; however, these allocations only affect available quantity and not the on hand quantity. If for any reason you have sales transactions that have been physically fulfilled -- where the inventory has [physically] been shipped, but the sales transactions need to remain, pending processing for the transfer and/or posting, it is advisable to create a Smartlist report and save/export it to an excel spreadsheet. This spreadsheet can be used during your final review of variances.

Once your counts have all be entered, you can view the variances and reconcile with any new unposted transactions, or with your known unposted transaction list (captured at the start of your process). We highly recommend Smart List Builder to create a ‘count’ Smartlist for easier review. This provides the ability to add both available and on-hand quantities from both the original Stock Count Schedule, as well as GP current to identify any potential change. Many of our customers have also added a calculated variance cost. In Smart Lists, the review can be filtered for any items with a variance quantity or amount and can be exported to an Excel spreadsheet for easier analysis.

Once you have reviewed and made any adjustments to your final variance quantities, then your Stock Count is ready to process in Dynamics GP. By processing the Stock Count, the variance transaction is automatically created. If you have used the Smartlist and Excel option, you may opt to process your stock count prior to adjusting your variances, and set the variance transaction so it does not automatically post. You can then move your analysis to your spreadsheets, and make changes to the variance transaction prior to posting. This may prove easier if your Stock Count Schedule has a large number of items or if you have a number of variances.

If you find you have a number of discrepancies, it may be time to invest in an inventory barcode solution, such as PanatrackerGP, to improve inventory management across all your inventory touch points. The addition of this technology will also reduce the time required to complete your annual or semi-annual physical inventory.

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