When should you perform a physical inventory count?

Many companies are aware of how important it is too keep track of their inventory. Faulty inventory projections create shortages, unsold goods and wasted warehouse space. By performing a physical inventory count a business can keep its information accurate and current. How often should a company go through the warehouse and track their products and supplies? That depends on a variety of factors.

Annual and Seasonal

How Many Times Should You Perform a Physical Inventory Count

There are companies that only perform inventory counts once a year or right before a given sales season. Usually, these companies do not have many products to track. Other organizations might opt for this method because they do not have the staff to carry out frequent inventory or the tools to make physical counts simpler.

Financial Advisors Henry and Horne LLP indicated pushing all your physical inventory tasks to a single event creates a lot of work. The warehouse must be completely prepped and cleaned, all problems detected must be dealt with at the same time and workers have to put in extra hours. It becomes a day dreaded by employees and managers.

Leaving too much time between physical counts will leave a company open to a number of unfortunate surprises. Products could have been lost, stolen or degraded. Storage issues won’t be noticed until they are physically checked.


Periodic counts might be once every two months or every three weeks, depending on warehouse size and company needs. This will create better visibility than yearly or seasonal options but it also requires more time and manpower. Workers must ensure they are performing inventory consistently between each count.

New employees who joined between counting periods must be trained to track the inventory the exact same way as previous workers to avoid inaccuracies.

The Cycle Method

The cycle method is a way for warehouse workers to consistently count some part of a company’s inventory.

Effective Inventory Management Inc. described the cycle method as segmenting a warehouse and physically inventorying a part of it every day. This is usually the best option for larger companies who need consistent reports. A company may have employees perform daily physical counts of certain warehouse locations or rank products that need the most attention.

This could mean a lot of labor time and energy is spent performing inventory everyday, but if a company uses the right equipment and software, it will not be a strain on businesses resources.

Consistent count technology solutions

Ideally, a company should perform physical inventory counts as often as it can. Using the right tools, a warehouse worker can be performing regular inventory maintenance without any issues.

Demand Media advised companies to implement technology solutions to make inventory counting simpler and more effective. A barcode scanning system will turn tedious information entry into an easy point-and-click process. Automated inventory tools cut down on the amount of user error and makes inventory training much simpler.

Inventory software provides data visibility even when physical counts aren’t possible. Data collected by barcode scans or other information devices can describe when a product was manufactured, how long it has been on the shelf and where it should be physically located in the warehouse.

For more information on inventory software and technology, download the Physical Inventory Count Dynamics NAV Module Data Sheet today.