What a physical inventory count is and how it works

What changes on count day

For the full process, see how to do a physical inventory count. Related reading: the count day checklist, why physical counts still matter and quantity on hand.

On count day, movement stops or is held at a cutoff, so every quantity you count belongs to the same point in time. Each location is counted once, and the team writes down a quantity for each location it counts.

The unit of the count is the location. The unit of the books is the item. So you add up the counts for each item across its locations before you compare anything.

On QuickBooks Online Plus or Advanced, the books keep one quantity on hand per item, and the inventory adjustment form takes one number per item. The full reconcile procedure is in the guide to QuickBooks Online inventory limitations.

When an item's total differs from the books, first check for transactions never entered or entered with the wrong date. Adjust the books only after that check.

How it differs from cycle counting

A physical inventory count covers everything at one date. Cycle counting covers a subset of locations or items on a schedule, so the warehouse is checked in parts over time.

The cycle counting entry explains the practice. The comparison of cycle counting and a physical inventory count sets the two side by side.

Where Count fits

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