How to: Perform a Physical Inventory

You must take a physical inventory, that is, count the actual items on hand, to check if the quantity registered is the same as the physical quantity in stock at the end of a fiscal year, if not more often. If there are differences, you must post them to the item accounts before you do the inventory valuation.

Important

This topic describes how to perform a physical inventory in a non-directed warehouse setup. For information on how to perform it in a warehouse setup with directed put-away and pick, see How to: Perform Warehouse Physical Inventories.

Apart from the physical counting task, the complete process involves the following three tasks:

• Calculate the expected inventory.

• Print the report to be used when counting.

• Enter and post the actual counted inventory.

To calculate the expected inventory

1. In the Search box, enter Phys. Inventory Journal, and then choose the related link.

2. On the Actions tab, in the Functions group, choose Calculate Inventory.

3. In the Calculate Inventory window, on the Options FastTab, specify the conditions to use to create the journal lines, such as whether to include items that have zero recorded inventory.

4. Set filters if you only want to calculate inventory for certain items, bins, locations, or dimensions.

5. Choose the OK button.

Note

The item entries are processed according to the information that you specified, and lines are created in the physical inventory journal. Notice that the Qty. (Phys. Inventory) field is automatically filled in with the same quantity as the Qty. (Calculated) field. With this feature, it is not necessary for you to enter the counted inventory on hand for items that are the same as the calculated quantity. However, if the quantity counted differs from what is entered in the Qty. (Calculated) field, you must overwrite it with the quantity actually counted.

To print the report used when counting

1. In the Phys. Inventory Journal window containing the calculated expected inventory, on the Actions tab, in the General group, choose Print.

2. In the Phys. Inventory List window, on the Options FastTab, specify if the report should show the calculated quantity and if the report should list inventory items by serial/lot numbers.

   For more information, see Phys. Inventory Journal.

3. On the Item Journal Batch FastTab, set filters if you only want to print the report for certain items, bins, locations, or dimensions.

4. Choose the Print button.

Employees can now proceed to count inventory and record any discrepancies on the printed report.

To enter and post the actual counted inventory

1. In the Search box, enter Phys. Inventory Journal, and then choose the related link.

2. On each line where the actual inventory on hand, as determined by the physical count, differs from the calculated quantity, enter the actual inventory on hand in the Qty. (Phys. Inventory) field.

   The related fields are updated accordingly.

   Note

   If the physical count reveals differences that are caused by items posted with incorrect location codes, do not enter the differences in the physical inventory journal. Instead, use the reclassification journal or a transfer order to redirect the items to the correct locations. For more information, see Item Reclass. Journal or Creating Transfer Orders.

3. To adjust the calculated quantities to the actual counted quantities, on the Actions tab, in the Posting group, choose Post.

   Both item ledger entries and physical inventory ledger entries are created. Open the item card to view the resulting physical inventory ledger entries.

4. In the Search box, enter Items, and then choose the related link.

5. Open the item card in question, and then, on the Navigate tab, in the Item group, choose Phys. Inventory ledger Entries.

See Also

Tasks

How to: Perform Warehouse Physical Inventories

Other Resources

Phys. Inventory Journal
Design Details: Integration with Inventory