Physical Count

Taking a physical count of inventory, assets or tools regularly is an absolute necessity for businesses. Sometimes known as an audit, taking a physical count of inventory is a way in which you go through all of your items to get an accurate list of everything you currently have. This audit, or physical count, allows you to adjust levels or inventory to accurately reflect your current stock. Performing a physical count keeps your inventory count correct and allows your accounting to be accurate.

When to Perform a Physical Count

The most common physical counts are performed on an annual or bi-annual basis. Sometimes companies perform a physical count as frequently as every month. The timeframe in which you complete a physical count is really dependent on how often you feel it is necessary. Many outside factors can affect your level of physical count. If you stock small parts such as nuts and bolts that are used to manufacture items, stock levels can easily be thrown off due to overuse of items or items getting misplaced, and a frequent physical count is especially important in these types of company.

Resources Necessary for a Physical Count

There aren’t many resources needed to perform a physical inventory process. The most obvious resource for a physical inventory process is the number of employees and labor hours needed. Using handheld scanners can make a physical count easier as well. These handheld scanners allow you to perform a physical count by scanning barcodes and storing all information in the scanner. After completing the physical count you can then update inventory accurately.

Problems resulting from a Physical Count

There are two main issues that can result from a physical count. One, employees may over-state inventory in a physical count to cover up items they steal. By over-stating in a physical count they are able to later cover up the stolen items as general theft or as a shrink issue. Another issue is accuracy of the physical count. Without using barcode scanners it is easy to over or under count the level of inventory currently available in a physical count.