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 a key to success. Too much inventory ties up capital that can be used elsewhere, and too little inventory can hamper sales operations. Good inventory management includes counting inventory. Two methods for inventory counting include taking a complete physical count or using a perpetual system like cycle counting.

With physical counting, you take a total count of everything in stock on an annual basis. Physical counting requires operations to be completely shut down, can be complex to manage, and can be time and resource consuming.

Cycle counting is a great way to maintain better inventory accuracy throughout the year. With cycle counting, you regularly count a small subset of inventory on specific days and adjust the inventory for any discrepancies between the 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 critical to business processes.

You can incorporate cycle counts into your daily operations. Use the insight from the counts not only to update inventory quantities, but also prevent future errors in counts by investigating the source of errors, such as theft, damage, or misplacement.

Cycle counting workflow

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