The Physical Inventory menu is where you perform and complete a physical inventory. Most users find that performing a physical inventory is not only an easy way to update inventory quantities, but it also a good way to check that the inventory, purchase orders, sales orders and manufacturing systems are being run properly.

You can control the order in which physical inventory is performed in FACTS through the Physical Inventory Order control in the IC Static Control F/M. FACTS allows you to perform physical inventory in item, alpha, vendor, item class, location (bin) or movement class order. Between physical inventories, you can select any physical inventory order. However, once you capture counts in the order selected, do not change it until after you run Update Inventory program.

A physical inventory may be performed for on hand quantities or available quantities (available = on hand minus committed). You determine which by setting the Physical Count Quantity flag in the IC Static Control F/M to either Available or On hand.

Performing Physical Inventory in FACTS

The programs included on the Physical Inventory menu appear in the order they should be used.

First, Print Count Sheets so staff members can record their counts for each item. Count sheets print the item number, description, package size, stocking unit of measure and a space to record the count for you so inventory takers only need to enter their counts on the sheets. The Print Count Sheet program gives you the option of including current quantities on count sheets for comparison purposes. The program also gives you the option of capturing on hand quantities from here, rather than the Capture Quantities program. It’s a matter of preference.

The Capture Quantities program, enables you to print count sheets anytime before a physical inventory and wait to capture the quantities when you are ready to perform the physical inventory. Therefore, the counts may be captured when printing count sheets or separately, as long as it is at the time of the physical inventory.

Once the quantities are captured, you physically counted the items in your inventory, enter them into the system. When entering counts, the items display automatically in the order of the count sheets. Depending on how the Physical Exceptions Only flag is set in the IC Static Control F/M you may need to enter all counts (if the flag is set to N) or just exceptions where there is a discrepancy (if the flag is set to Y).

Once the counts have been entered, run the Discrepancy Report to show discrepancies between what the system shows for quantities and what was actually counted. If there are problems on the report, you can enter counts again (replacing the old values) for the necessary items.

You may need to repeat the Enter Counts/Run Discrepancy Report process several times or until the physical inventory is balanced.

When all the numbers are satisfactory, run the Physical Inventory Update program. This updates quantities with the new counts and removes the old quantities. Discrepancies are updated to the adjustments and transfers file so they can be posted to General Ledger through the next Adjustment Register (Inventory Control-->Adjustments-->Adjustments Register).