Physical Inventory Selected by Item #

There are two methods that can be utilized to perform the physical inventory procedure - by inventory item number or by picking sequence. Choose the method that best suits your needs.  This document explains the physical inventory selected by item #. See the document: Physical Inventory selected by Picking Sequence.

The posting of the physical inventory count doesn’t affect the G/L module inventory.  The posting of the physical count does affect the I/C module inventory value reports. When the physical inventory counts are posted a posting register is printed.  These posting registers can be used to make a manual journal entry in the General Ledger module.  Give these postings to the person in charge of the G/L module.  

How the physical inventory selection and posting works: When an item is selected for physical inventory, a flag is set on the item telling the system that the item has been selected, and the quantity on hand at the moment it is selected is recorded.  When updating the physical inventory, enter the quantity that was actually counted. The computer then calculates the difference between this number and the quantity that was in the inventory file when this item was selected.  The computer updates the current "on hand", in the warehouse by the "change" in the quantity resulting from the actual count.

Example:

·       Friday morning an item is selected for physical inventory, the flag is set & the quantity on hand in the warehouse master is recorded as 10.

·       The item is counted right after the item is selected.  The count is 9.  

·       Friday afternoon, Monday & Tuesday morning this item is sold and received just like normal.

·       The count quantity of 9 is entered & posted on Tuesday afternoon.  The system knows this is -1 from the original count of 10.  Whatever the warehouse master on hand quantity is when the physical count is posted is adjusted by the -1.

·       The quantity on hand is 7 on Tuesday afternoon when the physical count of 9 is posted.  The quantity on hand of 7 is adjusted by the -1 to make it 6 on hand.

·       This is why it is very important to count the items right after the item is selected.  The count can be entered & posted later, but the actual counting must be done right after the items are selected for physical inventory.  

Note:

• Be sure, before selecting items, that any open orders that have been completed are invoiced. If an item is on an open order, but the order is not invoiced (layaway, packing list, etc.) you must include the item in the count. The item does not get subtracted from the quantity on hand until the order is invoiced.
• When counting, be sure to include any items that may be in a different place--such as setting aside an item for someone, or items that are on display.
• Be sure, before selecting items, that all merchandise to be included in the physical count has been Received on the system.
• Limit the selection to a number that can be counted right NOW. This will increase the accuracy of the count, since sales may be taking place at the same time.
• Actual updating of inventory may be done at a later time with no loss of accuracy, so long as the count is done immediately when the items are selected.

 

PARAMETER: In some cases the quantity on hand might not be wanted on the “Physical Inventory List by Item”.  The thought is if the person counting sees what the computer thinks is the quantity “on hand” they might not actually count the item.

PRINT'QTY=Y              

 

STEP 1:

Do the physical inventory by item #:

• Inventory (Module 5)
  • Physical Inventory Selection (Task 6)
    • Select Items for Inventory by Item # (Sub-task 1)

1. When items are selected for physical inventory by item #, the system prompts the following:

• The printer selection screen prompts.  Be sure the correct printer is selected in field 1 for the count sheets.
• Please enter - starting report class/ending report class: Return for All
• Please enter – starting product code/ending product code: Return for All
• Please enter - starting item #:/ending item #: Return for All (If ALL is selected, then a separate edit list for each item # prefix will be printed.)
• Please enter – starting warehouse #/ending warehouse #: Return for All
• Double space report? (Y/N)?
• Skip zero quantities items (Y/N)? (If skip zero quantities is Yes, they WILL BE SELECTED; they just WILL NOT PRINT on the edit list.)
• Skip serialized items (Y/N)? (If skip serialized items is Yes, then they WILL NOT BE SELECTED, and they WILL NOT PRINT on the edit list. They are ignored altogether.)

2. After selecting the items:

A printout is generated called, "Physical Inventory List by Item". This printout is what is used to write the inventory counts on. It has the following columns:

Item #

Warehouse #

Item description

Picking sequence

Sell-by (what the computer has on hand right now, in sell by units.)

Commit (# of items committed to customers)

Phy-count (This is the line where the counts are written.)

Stock-by (quantity on hand)

Price-1

NOTE: When updating the physical inventory, enter the quantity that was actually counted. The computer then calculates the difference between this number and the quantity that was in the inventory file when this item was selected. The computer updates the current "on hand", in the warehouse by the "change" in the quantity resulting from the actual count.  See the example in the beginning of this document.

 

STEP 2:

Enter the physical counts.  The updating quantities can be done by item # or by picking sequence using Sub task 3 or 4.  This document explains how to update by item # Sub-task 3.  To update quantities by picking sequence see document “Physical Inventory Selected by Picking Sequence”. 

·       If the items were selected for physical inventory by item # & you want to update by picking sequence or vise versa, selected by picking sequence but you want to update by item #; run the sub-task 7 Rebuild cross-ref file for update by picking seq PICBLD.

• Inventory (Module 5)
  • Physical Inventory Selection (Task 6)
    • Update Quantities by Item # (Sub-task 3)

·       The system prompts: Warehouse #. Type in the warehouse # that is being updated. One warehouse is updated at a time.  The items from that warehouse will be brought up.  If a physical inventory is being done for more than one warehouse, select one warehouse at a time.  This will provide an edit list and posting for each warehouse.

• Next the entry and edit menu will appear, use:
  • 1. Enter (add) New Adjust.

Note:  The "Current TRX count" and the "Unused TRX space". When first entering the above menu screen, the "Current TRX count" should be zero. If more than one person is entering adjustments, then the count will include the number of adjustments everyone has made. Try to coordinate the entry of adjustments, because whenever anyone posts adjustments, ALL of the adjustments will be posted together.

• The system prompts: Skip zero quantity items (Y/N)? N. You can scroll through all of the items.  If you would like to scroll through the items, but you don’t want to scroll through the zero quantity items, answer Y to skip the scrolling through of the zero quantity items.  You can still type in the item # of the zero quantity items to record a different quantity than zero.
• Field 1 Item #: Enter the item number
  • When the cursor is at item #, the RETURN key can be pressed to scroll through the items that were selected. Use this option if there are changes to most of the items on the count sheet list.
  • When the cursor is at the item # field, type in the item # that a change will be made to. This would be used if you have many items selected that you do NOT want change at this time.
• Field 2 Qty on hand: Enter the quantity counted.
  • The quantity automatically comes up in "sell-by" quantities.
  • When the cursor is at "Qty on hand", you may press the TAB key to enter "stock-by" quantity.

1. When approximately 50 items have been entered with adjustments, go to Print Adjust Edit List (Sub-task 4). You may enter adjustments for as many items as you want, but we recommend 50 as a number easy and efficient to work with and check.

• Check over the quantities entered (under the "counted" column), very carefully.
• If any mistakes were made, correct them in: Change existing adjust.(Sub-task 2)

2. When everything is correct, go to: Post Adjust to I/C files (Sub-task 5).

• When posting is done, everything in the adjustment file will be posted. So if anyone else has also entered adjustments, check to be sure that those adjustments are ready for posting also.
• If something is wrong, the posting can be rejected when the prompt comes up asking if the posting is OK, and everything will be restored like it was before the posting.

3.  If something is found to be wrong after the posting has been completed and accepted, then either reselect the same item and make a correcting physical count update, or correct the affected master files manually. We recommend that you use the first method for fixing mistakes, so there is a completely documented accounting trail, in keeping with proper accounting procedures. Also, if you try to correct mistakes by altering master files, it may create inconsistencies in the system if more than one master file is involved, and the change is not made in all of them the same way.

4. Save the posting registers. The last page of the posting register has the G/L account # and the dollar amount of the change in inventory.  These posting registers can be used to make a manual journal entry in the General Ledger module.  Give these postings to the person in charge of the G/L module.  Also, if there should ever be a discrepancy in a quantity, the posting can be checked to see what was entered in the physical inventory.

5.  More than one person can be entering the adjustments at the same time. They have to put in the warehouse # that they are entering the adjustments for. Only the items from that warehouse will scroll.  When posting, ALL the adjustments entered from that warehouse will be posted.

6.  To enter additional counts repeat this whole step 2.  Go back to the I/C module 5, Physical inventory selection (Task 6), Update quantities by item # AIVENT (Sub-task 3), type in the warehouse # & Sub-task 1 Enter (ADD) new adjust.

 

ERROR MESSAGE:

If the error message "skipping warehouse record" appears the likely cause is a record was erased from the Inventory Master File (Task 17) using Erase Selected Item Records (Sub-task 5) instead of being deleted using Delete Existing Item Records (Sub-task 3). Sub-task 3 also removes the matching file from the warehouse master file, but Sub-task 5 does not.  This recently has been updated so sub-task 5 Erase Selected Item Records DOES erase the matching supplier master & warehouse records. 

• If the item number that was erased improperly from the Inventory Master File is known, then go into Inventory Master File (Task 17), and add back the record, then use the delete function (Sub-task 3) to delete it. This will also remove the matching record from the Warehouse Master File.
• If the item number is not known, then go into: Special I/C Processing Menu (Task 25), Verify Item/Supplier/Warehouse Records (Sub-task 3)
  • Run through the program once, answering NO to all the questions. This will give a report that can be studied, and help decide what action is to be taken.
    • If records are to be removed from the warehouse master file that used to match records that have now been erased from the inventory master file, then run through the program again, and this time answer YES to the various questions that will provide the correct action.
    • If it is decided that the item records need to be added back into the inventory master file, then use Item Master (Task 17), to add the record directly to the inventory master file. DO NOT use the normal Add New Items (Task 1), or Quick Item Setup (Task 5). These would create duplicate records in the warehouse master file where the records already exist.

STEP 3:

THE FOLLOWING STEPS NEED TO BE PERFORMED FOR BOTH THE ITEM # AND PICKING SEQUENCE METHODS!

• Inventory Control (Module 5)
  • Physical Inventory Selection (Task 6)
    • Print List of Unadjusted Inventory Items (Sub-task 6)

1. This report prints a list of items that have been selected for physical inventory but have NOT been adjusted. This can be printed prior to clearing the "adjust flags" (see below for explanation) to find out which items may have been overlooked either in the counting or data entry portion of the physical inventory. Note that this report can ONLY be used BEFORE clearing the adjust flags.  The system prompts the following:

·       Include other cost (Y/N)? N

·       Skip zero quantity items (Y?N)?

·       Print in (1) Sell-b or (2) Stock-by units?

·       Please enter – Starting/ending report class:

·       Please enter – Starting/ending product code:

·       Please enter – Starting/ending picking sequence:

·       Please enter – Starting/ending item #:

·       Please enter – Starting/ending warehouse #:

 

STEP 4:

CLEAR INVENTORY ADJUST FLAGS

• Inventory Control (Module 5)
  • System Management Functions (Task 32)
    • Clear Inventory Adjust Flags (Sub-task 3).

This program clears all physical inventory selection flags.  You should NOT run this until ALL current inventory adjustments have been entered & posted.  No further adjustments will be allowed after clearing is done.  This is the last step in the physical inventory process. If you wish to get a list of items that were selected but NOT adjusted (those that are being cleared), please print that report BEFORE clearing (See Step 3 above).  There are NO selectable ranges.  All warehouse records will be cleared.
This Sub-task MUST be run when the posting is finished for ALL the adjustments for the physical inventory.

 

 

ADDITIONAL INFORMATION:

Rebuild Cross-ref File for Update by Picking Sequence (Sub-task 7)

• Inventory Control (Module 5)
  • Physical Inventory Selection (Task 6)
    • Rebuild Cross-ref File for Update by Picking Sequence(Sub-task 7)

1. This program will rebuild the picking sequence/item number cross reference file after all items for all warehouses have been selected to be included in the physical inventory. A printout will not be generated; all necessary information should be on reports generated during the selection of items by picking sequence.

• Inventory Control (Module 5)
  • System Management Functions (Task 32)
    • Clear Inventory Adjust Flags (Sub-task 3).

This Sub-task MUST be run when the items were selected for physical inventory by item # & you want to update by picking sequence or vise versa, selected by picking sequence but you want to update by item #; run the sub-task 7 Rebuild cross-ref file for update by picking seq PICBLD.

PRINT INVENTORY VALUE REPORTS RECOMMENDED:

• Inventory Control (Module 5)
  • Item Status (Warehouse) (Task 10)
    • End-of-Month Status by Location / Product Code or Rep Class WHSEOM (Sub-task 2)

 

• Inventory Control (Module 5)
  • Item control (Task 9)
    • Inv value, general ledger acct# INVGLA (Sub-task 12)

 

INVENTORY MONTH END:

See the document Inventory Month End Procedures.