What inventory variance means after a physical count

What changes on count day

You take the count by location, but a variance belongs to an item. Add what you counted for one item in every location. Then compare that total with one book number. QuickBooks Online does not track inventory by location within a warehouse, and Plus and Advanced keep one quantity on hand per item, so the books hold no number for one location.

The calculation is the counted total minus the book quantity. Say aisle 4 rack B holds 30, the overflow zone 12 and the returns zone 4. The counted total is 46, and if the books show 50, the variance is -4, a shortage. A count of 53 against the same 50 is +3, an overage.

A variance is true for one moment, so write down when you took the book number. If you take it from the Products and services export, Intuit's note inside the exported file says that Quantity on Hand "is calculated at the time you export" the list. For the whole process, see how to do a physical inventory count.

A net of zero can still hide wrong items

A variance can be a shortage or an overage. If item A is 5 short and item B is 5 over, the two add up to zero, yet two items are wrong. Read the variance for each item, not only the total.

A variance is not yet a cause

A variance says the count and the books differ. It does not say why. It is not automatically shrinkage, because a transaction entered late or with the wrong date produces one too.

Check for transactions never entered or entered with the wrong date before you book a difference as a loss. Why QuickBooks inventory does not match the warehouse covers the QuickBooks side.

See also how to reconcile variances after a physical count and inventory shrinkage.

Where Count fits

Count's variance report lists each item with its variance. It shows the item number, description, the locations where it was counted, snapshot quantity, counted quantity, quantity variance, percent variance, cost impact when the plan has cost data, and who last counted it.

Count connects to QuickBooks Online and imports items with their QuickBooks quantity on hand, and the adjustment compares each counted total with that QuickBooks quantity. InventoryWare Count is built for one complete physical inventory count, and posting adjustments to QuickBooks from a partial count is not available.