Cycle counting with QuickBooks Online inventory

What changes when you count a few locations at a time

Each session covers only some locations or items, and the counter compares what is there with a recorded quantity for it. The practice is only as good as the recorded quantity behind each count.

You choose what to count in one of a few ways. You can start with the items that move most or are worth most, which is the idea behind ABC counting. You can also pick a random sample, count one zone at a time, keep a control group of items you recount on purpose, or count an item when you suspect a discrepancy.

The practice spreads the effort across many small sessions and can run beside normal work if you control movements in a location while it is counted. It also needs a standing schedule, and an item left off that schedule can go uncounted for a long time.

What it needs from your books

QuickBooks Online Plus and Advanced keep one quantity on hand per item, with no location, and the inventory adjustment form takes one number per item. So when you count only some of an item's locations, the counted total is partial, and a partial total of an item's locations has no matching book number.

You can compare an item with its QuickBooks quantity only once every location holding it is counted. Plan the schedule so that each item's locations are counted together.

If your company shows an Inventory counts option under Products and services, Intuit's instructions have you enter a New Quantity for each product in the count and finalize, which creates an Inventory Quantity Adjustment. Intuit's instructions have no step for recording a location, assigning a counter, recounting or approving a variance, as the Inventory Counts article sets them out.

When it is the right choice, and when one complete count is

Cycle counting suits many items, fast turnover, an operation that cannot pause and a team that will keep the schedule. One complete count suits a smaller or slower inventory with a quiet window, and books that need one reconciliation at one date.

A small warehouse can also run a few focused counts of high-risk locations as its own check, and adjust the books from the one full count. The comparison of cycle counting and a physical inventory count sets the two side by side, and the physical inventory count entry defines the complete count. The guide to doing a physical inventory count walks through it.

Where Count fits

InventoryWare Count is built for one complete physical inventory count, and posting adjustments to QuickBooks from a partial count is not available. In Count, every counted quantity is recorded against a location, and an item's counted total is summed across the plan's locations.