Physical Inventory Procedure

Pear Tree
2016-11-10 15:47

Physical Inventory Procedure – Dealership

 

A Physical Inventory is the act of physically counting the individual items in stock at a particular date and time at your place of business.  It is typically performed prior to a company’s year end.

 

1.     Decide whether to enter counts for all parts or only some parts.

·      From the top menu bar, select [System Admin], [Parameters] and then click [Store].  

·      Select the store you’re doing the physical count for, and click on the Parts tab.

·      Turn on the checkbox Post only items counted if:

o   you are not planning to count all parts for a store (partial physical) OR

o   your parts inventory is fairly accurate 

·      If Post only items counted is checked, you only need to enter counts for the parts whose on-hand quantities you want to change.  The on-hand quantities for all other parts will not be changed by the Post Counts step.

·      If Post only items counted is not checked, you must enter counts for all parts that your store has in stock.  The on-hand quantities for the parts you don’t enter will be set to zero by the Post Counts step.

2.     Print the Count Sheets.

·      From the top menu bar, select [Inventory], [Parts], [Physical Inv.], [Reports/Forms], and then click [Count Sheets].  

·      You can print all of the parts or limit by Location, Class, Primary Supplier or part number range

·      Uncheck the ONLY Stocked Product checkbox to print all parts

3.     Physically freeze your inventory.  This means no sales or receiving of any kind should be performed during the physical inventory process.  If you are unable to do this, keep track of all activity that affects the part on-hand quantities in the Dealership database.  Then either adjust the counts prior to the Post Counts step OR adjust the counts after the Post Counts step without affecting the General Ledger (use Receive Product).

4.     Manually enter the counts on the count sheets you printed.

·      Don’t forget to include parts on open work orders in your count.  Part quantities on an open work order or open special order show in the committed column on the Count Sheets.  

·      You can also run the Required Parts report to see parts and quantities on open work orders.  From the top menu bar, select [Service], [Reports], [Scheduling] and then click [Required Parts].  Leave From Scheduled Date blank to get all open work orders scheduled up to today.  Click the Show Installed Parts checkbox to see parts with Part install status Complete.


 

5.     Enter your counts in the system.

·      From the top menu bar, select [Inventory], [Parts], [Physical Inv.], and then click [Inv. Count Upd.].

·      Enter the Product Number, the New On Hand quantity for your store and (optionally) the physical location of the part within the store.  You can set up locations from [Inventory], [Parts], [Administration], [Inv. Locations]

·      NOTE: If the store parameter Post only items counted is not checked, you must enter counts for all parts that your store has in stock.  The Post Counts step will zero out all on-hand quantities, and then post only the entered counts. 

 

6.     Print Product Listing report for valuations (Optional, but recommended the first time you do a Physical Inventory).

·      From the top menu bar, select [Inventory],[Parts], [Reports], [Listings], and then click [Std Products].

·      This report will give you the value of your parts prior to the physical inventory to compare to the report after the physical inventory. 

 

7.     Print the Counts Entered report.

·      From the top menu bar, select [Inventory], [Parts], [Physical Inv.], [Reports/Forms] and then click [Counts Entered].

·      Use this report to compare what was written on the count sheets to what was actually entered into the system.  It can be kept as backup information.

·      NOTE: You can also reprint the Count Sheets.  The Count Sheets will show the on-hand quantities entered for all parts.  You will be able to determine if any errors were made when you entered the counts.

 

8.     Print the Discrepancies report.

·      From the top menu bar, select [Inventory], [Parts], [Physical Inv.], [Reports/Forms] and then click [Discrepancies].

·      Use this report to check for:

o   parts with an on-hand quantity but no count entered (if the store parameter Post only items counted is not checked) 

o   parts with an on-hand quantity different than the count entered by a specified percentage 

o   parts with an on-hand quantity greater than the count entered

o   parts with an on-hand quantity less than the count entered

o   parts with an on-hand quantity different than the count entered


 

9.     Post Inventory Counts.

·      From the top menu bar, select [Inventory], [Parts], [Physical Inv.], and then click [Post Inventory Count].

·      Select the product class you want to update counts for, or accept the default (– Select Product Class –) to update counts for all product classes. 

·      Enter a date (usually your year-end date) in the posting date field if different from the default date.

·      If desired, click on Produce Audit Report to show the parts and quantities which will be changed by posting the counts.  

·      Press Post Counts to update on hand quantities.  

·      NOTE: If the store parameter Post only items counted is checked, Post Counts will only change the on-hand quantities for the part counts you entered.  If the store parameter Post only items counted is not checked, Post Counts will zero out all on-hand quantities, and then post only the counts entered.

 

10.  Print Product Listing report 

·      From the top menu bar, select [Inventory], [Parts], [Reports], [Listings], and then click [Standard Products].

·      This report will give you the value of your parts AFTER the physical inventory.  Give the report to your bookkeeper or accountant.

 

11.  Unfreeze inventory and begin carrying on business as usual.  Your physical inventory is now complete.
            

 

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