Physical Inventory - Cutoffs

In order to achieve an accurate count, decisions must be made regarding cutoffs that largely involve Shipping, Invoicing and Receiving. A critical step in the count process is to get the stock in the Warehouse in sync with booked Quantity On Hand in the system so that the calculated variances are as accurate as possible.

Some considerations include:

  • If you receive a shipment, put the stock away in its proper location in the Warehouse to ensure it is included in the count and then process the receipt into the system to increase the booked Quantity On Hand.

  • If a shipment arrives late, such that you decide to not include that receipt in the count because you do not have time to label, put on the shelf and process the shipment into the system, then hold the entire receipt on the dock and clearly mark it "Do Not Count". Do not process the receipt through the system. Keep this shipment outside of the count.

  • Print the Shipping Document Report (OE52) and account for all uninvoiced Orders. Outstanding Orders must be Invoiced if they were shipped to bring the system quantity in line with the shelf quantity. If the picking slip was printed but not yet pulled from stock, then the stock should be included in the count. If stock has been picked and staged for a Customer Order but not yet been shipped, the stock must be counted or Invoiced and treated as though it had been shipped.

  • Consider Warehouse transfers. If the transfer is "Direct" (TAT=TRN) and the transfer did occur, then be sure those picking slips are Invoiced; this will reduce Quantity On Hand (QOH) in the sending Warehouse and increase the QOH in the receiving Warehouse. If the transfer is "In-Transit" (TAT=WHS) then some stock may still be in-transit. Print the In-Transit Shipment Report (IC57) to identify those shipments and confirm that any reported Orders are legitimately still in transit. If the stock has arrived in the receiving Warehouse, process that receipt through Receive Branch Transfers (IC55)/Whse Receipt Stock Audit Trail (IC56).

  • Process all stock adjustments through Enter Inventory Adjustments (IC50)/Print Stock Adjustments Report (IC51).

  • All Invoicing, Receiving and Adjustment cycles, which affect QOH, must be completed.

  • If you use "dummy" Product codes for miscellaneous sales, ensure that the QOH and the Average Cost are zero before freezing the Inventory and running the Variance Report.

  • Run Set-Up Files for Warehouse (PI01) several days in advance of the count date. This program performs a diagnostic on the Inventory Master files. Reported 'out of balance' issues need to be communicated to the PointForce Enterprise Support Department for investigation.

  • The Freeze Inventory (PI10) program is not to be run until all movement has been processed. If printing Before/After Evaluations, the Before Evaluation can be printed now.