Performing a Warehouse Physical Inventory

At least once in every fiscal year, perhaps more, you must take a physical inventory (that is, count all the items on hand) to see if the quantity registered in the program is the same as the physical quantity in stock. If there are differences, you must post them to the item accounts before you do an inventory valuation. You also post your results to the physical inventory ledger, to record that you have counted a particular item on a particular date. To post in the physical inventory ledger, however, you must be sure that you have counted all of the items concerned, not just some of them.

If you are not using directed put-away and pick for a location, you perform a physical inventory using the Phys. Inventory Journal (process described in Filling In the Physical Inventory Journal with the Calculated Quantities). If you are using directed put-away and pick, you use the Whse. Phys. Inventory Journal, and later on, the Phys. Inventory Journal. This process is described here. In warehouses with bins, the counting is performed and registered bin by bin.

To Perform a Warehouse Physical Inventory:

  1. Open the Item Journal window and click Functions, Calculate Whse. Adjustment.

  2. Fill in the batch job request window with the numbers of the items you want to count and with your location, click OK, and post the adjustments if any. If you do not do this before you perform the warehouse physical inventory, the results you post to the physical inventory journal and item ledger in the second part of the process (described below) will be the physical inventory results combined with other warehouse adjustments for the items that were counted.

  3. Open the Whse. Phys. Invt. Journal window.

  4. In the journal, click Functions, Calculate Inventory. The Whse. Calculate Inventory batch job request window appears.

  5. Set the filters to limit the items that will be counted in the journal, and then click OK. The program creates a line for each bin that fulfills the filter requirements. You can at this point still delete some of the lines, but if you want to post the results as a physical inventory, you must count the item in all the bins that contain it.  

If you only have time to count the item in some bins and not others, you can discover discrepancies, register them and later post them in the item journal using Calculate Whse. Adjustment.

  1. Open the Whse. Phys. Inventory List report request form and print the lists on which you want employees to record the quantity of items that they count in each bin.

  2. When the counting is done, enter the counted quantities in the Qty. (Phys. Inventory) field in the warehouse physical inventory journal.

Note: In the warehouse physical inventory journal, the program automatically fills in the Qty. (Calculated) field on the basis of warehouse bin records and copies these quantities to the Qty. (Physical) field on each line. If the quantity counted by the warehouse employee differs from what the program has entered in the Qty. (Physical) field, you must enter the quantity actually counted.

  1. When you have entered all the counted quantities, register the journal by pressing F11 or clicking Registering, Register.

When you register the journal, the program creates two warehouse entries in the warehouse register for every line that was counted and registered:

When you register the warehouse physical inventory, you are not posting to the item ledger, the physical inventory ledger, or the value ledger, but the records are there for immediate reconciliation whenever necessary. If you like to keep precise records of what is happening in the warehouse, however, and you counted all of the bins where the items were registered, you should immediately post the warehouse results as a physical inventory in the Inventory menu.

To Post Warehouse Results as a Physical Inventory:

  1. Open the Phys. Inventory Journal window and click Functions, Calculate Inventory.

  2. Select the same items that you counted in the warehouse physical inventory that you just performed, and click OK.

  3. The program creates lines in the Phys. Inventory Journal window for these items. Note that the program has filled in the Qty. (Phys. Inventory) field with the sum of the quantities you counted and registered for the item bin by bin in the Whse. Phys. Invt. Journal and has calculated the Quantity field.

  4. Without changing any quantities, click Posting, Post.

The quantities in the item ledger (item entries) and the quantities in the warehouse (warehouse entries) are now once again the same for these items, and a full physical inventory has been performed for the item.

Note: Only an employee with permissions in the Inventory area can update the item ledger and physical inventory ledger with the results of the warehouse physical inventory.