Processing a Complete Inventory Count
The following are the procedures to be followed when you perform a complete count of all of the inventory items in a single warehouse location.
1. Halt all invoicing, receiving, and inventory transfer operations. Once you have determined the type of count to be processed, you should halt all activity that will affect inventory on hand quantities in the location to be processed.
2. Prevent the addition of any new items to the Inventory Master file. It is recommended that no new inventory items be created in the location being processed until all of the steps in the count procedure have been completed. This is due to the fact that the addition of new items can slow down the data entry process and create confusion among the personnel performing the count (if items in the range being counted are not printed on the count sheets and are found during the physical count, they should be noted and handled as a separate step).
3. Optional but recommended, Record the value of the inventory in the location to be processed. An inventory valuation report is run to record the value of the inventory at the beginning of the count process. This report can be used to verify the changes that will be made to the inventory subledger as a result of the count process and to substantiate the entries made to the G/L at the end of the count process. This step is somewhat optional as the system will provide you with reports that list the actual changes made to the inventory quantities and values, but it can be performed quite easily and it provides additional printed backup for the count process and resulting financial effects. The valuation report can be produced at the beginning of the count process or just prior to the update which is done at the end of the count process depending on whether or not other transactions are being processed during the count process.
4. Select the Prepare Inventory Count program from the menu
Highlight the warehouse location to be processed from the list displayed by the program and press the ENTER key to select the location.
If you are performing a complete inventory count for the location, you should NOT select a bin, item, or item description range. All items in the selected location should be counted when a complete count is processed.
Enter a Y in the Create count records with a 0 quantity selection to force the entry of the actual quantity found for each bin/item. If a N is entered for this selection, the count records will be created with the current on hand quantity for each bin/item loaded into the count quantity field.
Select the output option for the report produced by the program. The Prepare Inventory Count program will produce a list of any errors it encounters during processing. If the report shows errors, the errors should be fixed and the Prepare Count program should be re-run until it is error free.
If the selections are correct, accept the Y which defaults into the Selections OK - Begin Processing selection and press the ENTER key to begin processing. If you need to make changes to the selections displayed on the screen, input an N in the Selections OK - Begin Processing selection. This will allow you to re-enter the selections to be used by the program. Once you have entered the appropriate selections and have entered a Y into the Begin Processing selection, the Prepare Inventory Count program does the following.
Clears the Inventory Count file of all count records for the selected location. Clearing the Inventory Count file ensures that the Count file does not contain any records from prior counts for the location being processed
Creates a count record for each bin/item combination in the range being counted.
Moves the on hand quantity for each inventory item and bin to pre-count quantity fields in the bin and item records.
5. Check the Count records created by the system. Once the Prepare Inventory Count program has finished processing, you should be able to view the count records created by the program in the Count Management program. If the records in the count file look incorrect (too many or too few), you may use the Prepare Inventory Count program to clear out and re-load the file. You should not manually delete count records in the Count Management program as the system will not process items that do not have count records.
6. Print Inventory Counting Worksheet. The StreamII Count Worksheet or Bin Contents report (FV096R05) allows you to select an Inventory location and a bin range. You may also generate other count worksheets or tickets, based on the location and item or bin range being processed. The standard report outputs in Bin then Item sequence, and it allows you to print or suppress the printing of the quantity for each bin. The report also allows you to select only items with values over a specified dollar amount (this selection is normally not used since the Prepare count program does not include the same option). When you are processing a complete count, you should select a location and include all bins on the count worksheet.
7. Count Inventory. Count the inventory and record the actual quantities found on either the count sheets printed in the previous step or using an automated data collection device.
8. Input the Counted Quantities. Enter the actual quantity counted for each item using the Inventory Count Management Program. This data may also be loaded automatically if the count information was collected with an electronic data collection device.
Verify or change the location shown in the top of the program (the location can be changed by usingthe F10 or menu key to access the Change Location option shown under the Options submenu.
Select the display sequence to be used for entering the count information. This will normally be bin sequence if you are performing a cycle count and are using the standard worksheet.
Find the count record for the item and enter the counted quantity. The Prepare count program creates count records for each bin and item combination in the location and range being counted. You should find and edit the count record to input the counted quantity. You may also enter a short note and a ticket number into each count record.
If you do not have a count record for a bin/item combination that is found during the count (and the bin/item is in the proper range being counted), you should add a count record (and a bin record if required) for the item. This can be done using the insert key. When you press insert, the count program prompts you for the item that the count record should be created for. Once you select an item, the system displays the existing bins for the item. You may press the insert key in the bin list to create a new bin for the item (this is normally required) and once you have created and selected the bin, the system will create a count record for the bin and item combination.
Note: If you delete a count record, the system will not process the bin/item combination (bin/item combinations are not adjusted unless count records are present for them). The delete option is normally disabled in the Count Management program.
Note: You may only create one count record for each loc/item/bin combination in each warehouse. The system compares the count qty for each bin to the pre-count quantity for the bin, and it expects only one record for each loc/bin/item being counted. The indexes on the count file also prevent creating more than one count record for a single loc/bin/item combination.
9. Print Variance reports. The variance reports are used to verify the counted quantities, and to confirm that changes that will be made by the update program run at the end of the count process. The Complete Count variance report may be used to confirm that count records have been entered for all items which have on hand quantities and helps to ensure that items are not zeroed out inadvertantly. The Costed Variance report or Costed Variance report by Item shows the quantity and value adjustments that will be made when the current count information is applied. When a Complete Count is being performed, you should run the variance reports as follows.
Select the Inventory Complete Count Variance report from the menu and select the inventory location being processed. Select Y to Print Bin Detail, and enter a Y or an N in the select only items with vairances. Select the appropriate output option and press the ENTER key to run the report. The report output will list the total variance for each item and it will also output the bin detail for each item. A Not Counted message is output next to any bin item combinations which have not been entered into the Count file, so that you can research and count the bin as required.
10. Recheck any items with large variances and adjust the count quantities as required. The Complete Count Variance report can be re-run until you are sure that the variances shown on the report are correct.
11. Run the Costed Count Variance Report. This report also prints in bin sequence and it shows the variance for each bin/item in units and in dollars (based on the unitcost of the item). This report previews the inventory adjustments and the accounting adjustment that will be made when the count is applied.
12. Optional but recommened. Back up the files which will be affected by the adjustment process. Backing up the Inventory Master file (File 70), Bin file (96) and the Inventory Activity file (File 91) is an optional but highly recommended precaution. Performing this step requires that the actual count update process be performed after hours, or on a weekend, when no other inventory activity is taking place, but it allows you to recover easily if the update process is interrupted by a hardware or power problem, or if the update produces unexpected results.
13. Run the Apply Inventory Count program. The Apply Inventory Count program actually adjusts the bins and item records based on any variances found during the inventory count. The program can be run in both preview only and live mode. You should run the program once in preview mode and review the report output by the program. This report will show the actual changes to be made by the count programs and the value of these changes. The value change shown on the report should agree with the amount shown on the Costed Count Variance report.
14. Once you are satisfied with the information shown on the final variance reports and have previewed the count adjustment, you should re-run the program and select Y to Update file. When you select Y to update, the system will display the amount of the proposed changes, and it will prompt you to re-input the adjustment amount. Once the adjustment amount is confirmed, the system will apply the count information to the system. The Apply Count program will adjust any bin and item quantities as required, write inventory and bin activity records to record the changes, and post these changes to the GL
More:
Correcting an Unposted Inventory
Receipt.