What is the Difference between the Physical Count and Cycle Counting?

November 13th 2013 15:29:15 PM



As we discussed a few weeks ago, inventory counting is critical to your company’s success. Inaccurate inventory data can result in delayed orders and unhappy customers, not to mention false inventory reports. In order to prevent inventory inaccuracies, you must perform periodic inventory counts. Companies can count inventory in one of two ways: through the yearly physical count or cycle counting.

In order to determine the best inventory counting method for your company, you need to have a basic understand of the differences between the two:

  • Physical Counts:
    • Labor and time intensive
    • Provides yearly data on inventory variances
    • Requires business downtime
    • Occurs once a year
  • Cycle Counting:
    • More labor and time efficient
    • Reduces inventory variances regularly
    • No business downtime
    • Occurs on a regular basis

Most companies are familiar with physical counts. If you have any form of inventory, you probably perform yearly physical counts. While this method certainly gets the job done, cycle counting is a more proactive approach and allows you to reduce inventory variances on a regular basis as opposed to yearly. Cycle counting requires you to be committed to performing regular inventory audits at least once a week. If you cannot make this commitment, then you should stick to the yearly physical count.

Stay tuned to our blog for more information on the benefits of cycle counting. If you could use some advice in the area of inventory and warehouse management, contact our warehouse experts today. We offer a variety of solutions to assist you with all of your inventory counting and warehouse management needs.

Featured

How to Manage Change and Risk in WMS Upgrades
How to Manage Change and Risk in WMS Upgrades

In a previous blog post, we looked at 5 Signs you...Read more

Manufacturers and Distributors Benefit from Warehouse Automation 
Manufacturers and Distributors Benefit from Warehouse Automation 

Manufacturers and distributors focus on decreasing costs while increasing efficiency...Read more

Scanco Announces Partnership with Presales Leader at the Acumatica Summit
Scanco Announces Partnership with Presales Leader at the Acumatica Summit

Scanco Software, LLC, a leading provider of innovative warehouse management solutions, is excited to announce its partnership...Read more


Get the Free Download

Fill out the form to gain access to all Scanco resources.