Cycle counts overview

Cycle counting is an inventory auditing procedure in which a small amount of inventory is regularly counted in the warehouse. The general goal is to count the entire inventory over a period of time and update the inventory at the end of each count.

About cycle counting

Accurate inventory is essential to your business success. Too much inventory ties up capital, while too little can hamper sales operations. Effective inventory management relies on regular inventory counts.

There are two common inventory counting methods: Physical counting and cycle counting:

• With physical counting, you perform a complete count of everything in stock, typically on an annual basis. This method requires operations to be completely shut down, can be time‑consuming, complex, and resource intensive.

• Cycle counting helps maintain inventory accuracy throughout the year without interrupting daily operations. Instead of counting all items at once, you regularly count small subsets of inventory on scheduled days and adjust quantities to resolve discrepancies between expected and actual on-hand quantities.

When you set up cycle counts in Sage Intacct, you can use any of the commonly known cycle counting techniques to determine which items to include in the cycle counts and the count frequency. For example, you might tailor your cycle counts to focus on items of higher value, higher movement volume, or those items which are critical to business processes.

You can also use cycle counts to improve inventory processes. With cycle-count results, you can investigate discrepancies to determine issues that might be caused by theft, damage, misplacement, or data entry errors.

Cycle counting workflow

The cycle counting workflow is the continuous process of selecting items to count, counting, and reconciling the counting results: