Physical Inventory Counting - Helpful Hints
Reference Number: AA-00209 Views: 17775 Created: 2011-11-30 14:17 Last Updated: 2012-12-27 10:58 0 Rating/ Voters

Plan Ahead
To PDT or not to PDT
Inventory Counting Overview
Counting In Groups

Plan Ahead

The most important tip we can give you about Physical Inventory Counting is to PLAN AHEAD.
Before you even begin, make sure you understand what is involved, what your choices are, and what to watch out for. Be sure to plan for enough time and allocate enough staff for this project. If at all possible, it is much better to complete the entire inventory counting process (including accepting new counts) during a time when the store is closed and no new sales or received merchandise are coming in.

Before you start doing your physical inventory counting please be sure to read this article and available documentation, and familiarize yourself with the inventory counting screens, so you will know what to expect when counting your inventory for real.

NOTE: By farther easiest and most reliable way to count inventory--if you have bar codes on most of your merchandise--is to use a Portable Data Terminal (PDT). Please consider this and allow time to obtain a PDT (or two). You can purchase or even rent PDTs from CerTek software or an authorized dealer. Some new features are only available on selected PDT models. More on this below.

Please upgrade to the latest Artisan software version before you start. At the very least, get the (free) latest update for your particular version (2.1, 3.0, etc) to make sure you get the latest fixes. However, some of the Physical Inventory Counting features and improvements are available only in 3.2.15 or later (particularly, PDT Product Lookup Tables and Counting In Groups, as noted below). If you have an active support plan, you can upgrade to the latest version for no additional charge.

To PDT or not to PDT

A Portable Data Terminal (PDT) is a hand-held battery-operated bar code scanner with a small keyboard & display, and enough memory to hold scans and quantities for thousands of items at a time.

If most of your items are bar-coded, Inventory counting by PDT is much easier and more reliable than counting manually using tally sheets. The cost of one of these units (as low as $699) is well worth the savings in labor, increased accuracy, and potentially reduced closing time. Plus, you can use the PDT for other things year round, such as Gift Registry entry, Price Checks, POs, Receiving, and more. However, if you really feel you can't manage it, we do offer PDT rentals.

The best way to use PDTs is with Product Lookup Tables, which let you download key details from your Artisan inventory item database into the PDT. Then when you scan an item in the PDT, you immediately get an error if the scanned code is not in your database, so you can set the item aside and investigate it. Without Lookup Tables, the scans are not validated until you upload to the computer, by which point you probably don't know which physical item it was. Lookup Tables also let you see the product description, SKU or Vendor's P/N, Retail Price, and optionally current Qty On Hand, as soon as you scan each item. (See the article on "Using Lookup Tables with PDTs" for more info.)

Product Lookup Tables are only supported in Artisan version 3.2.14 or later, and only with Metrologic Optimus S and ScanPal 2 brand PDTs.

With or without Lookup Tables, you simply scan each item into the PDT, enter a Qty, and move on to the next item, in any order. Once you've scanned all your merchandise, you simply upload the counts to the computer. If you prefer, you can scan & upload in multiple batches; each time you upload, it will add the new counts to any you have alread accumulated.

If you don't use a PDT, you have to have Artisan print Inventory Tally Sheets, which list all of your items (grouped by Category, Vendor, or other criteria) and give you a place to record the counts for each item. Optionally, the report can include a space to write in tally marks ("ticks") that you can add up at the end to get the total count. The tally sheets can be printed with expected counts or without them, to force a "blind count". Once you've finished counting, you have to take the tally sheets to the computer and manually enter the counts for all of the items (or if you included expected counts, only those with counts that don't match: the "exceptions").

There's also a rarely-used third option: If you can reach all of the merchandise with a regular scanner (by carrying items to the scanner, by using a real-time wireless scanner, or by putting your computer on a cart), then you can enter counts by scanning, which effectively lets you use the computer as a PDT, without a separate upload step.

Inventory Counting Overview

We'll summarize the Inventory Counting process here, but please also read section 6.2.5, "Physical Inventory Counting", in the Artisan User's Manual Version 3.0. It still applies well to later versions, though a few additional options have been added.

If there's something you don't understand, please ask us, or read the documentation again. You will find Inventory Counting to be a lot easier, quicker and more accurate when you know what you're doing.

The Inventory Counting process is divided into several steps. In some cases, you may repeat one or more of these steps.

  1. Prepare for Counting -
    • If you are using a PDT, this step includes charging the battery and possibly Downloading a Product Lookup Table to the PDT.
    • If you are not using a PDT or scanning directly, you will start by Printing Inventory Tally Sheets. These list all of your items (grouped by Category, Vendor, or other criteria) and give you a place to record the counts for each item.
  2. Enter Inventory Counts - Enter the counts into the computer by uploading from your PDT, by scanning items directly, or by reading from tally sheets and entering them manually. These are "Physical Counts" and are kept separate from the "real" Qty On Hand numbers for each item (at each location, if tracking inventory by location).
  3. Review Entered Counts & Make Adjustments - View discrepancies ("exceptions") once you have completed entering your counts, double-check any suspicious counts, and correct any mistakes in the physical counts.
  4. Accept New Counts - This "finalizes" the counts, by copying them from the Physical Counts to the "real" Quantity On Hand numbers in your Item Records. Any changes made are recorded as Inventory Adjustments. (Reductions are recorded as "Shrinkage". Increases are recorded as "Corrections".)

You can repeat steps 2 and/or 3 any number of times, as you move through your stock in sections, or do it all at once.

You can even repeat the entire process, but then you must be very careful not to count things twice, and to account for any items you didn't count. See Counting In Groups for more details.

IMPORTANT: Once you begin step 2 (for each group, if counting in group), you should generallyNOT make any sales, enter receiving, or make any other changes to QOH for items that might possibly have been counted already, until you've accepted those counts. (If you do sell something in the middle of counting, make sure you know whether each unit sold has already been counted, and if so, manually subtract it from the Physical Counts before you Accept New Counts. This is tricky, so be careful, or avoid it entirely by counting while you're closed.)

Do not leave Physical Counts pending for a long time before you Accept New Counts, as you will be unlikely to be able to keep up with the manual adjustments needed if you continue to take sales or otherwise change QOH.

Counting In Groups

While it is best to complete your entire inventory count while the store is closed, this may not be feasible, especially for stores with large amounts of merchandise. For such stores, Artisan now supports "Counting In Groups", which lets you complete (and accept) counts for one group of merchandise (typically by Category or Vendor) while you are still taking sales for the rest of your merchandise, then move on to the next group.

This is only supported in Artisan version 3.2.15 or later, and works best when using a PDT.

You must still make sure that you don't make any sales, enter receiving, or make any other changes to QOH for items in the group that you're in the middle of counting, until you've accepted counts for that group. (Or if you do, make sure you know whether each unit sold has already been counted, and if so, manually subtract it from the Physical Counts before you Accept New Counts.)

Zero Out Items w/o Recent Accepted Counts - [Only available in version 3.2.15 or later] - Use after counting in groups. It sets Quantity On Hand to zero for items not counted since a given date.

It is very important that you include counts for each individual product in one group only. That is, if you count some units of a particular inventory item (SKU) in one group, you must make sure to include all units of that item in the same group. Otherwise, your QOH for that item will be set to the count from the last group that included it, not the total.

If you do find additional units of an item that you already included in another group that has already been accepted, you should go directly to the Item Record and manually add the additional units to Quantity On Hand (as a Correction).

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