July 11, 2022

How To Take A Physical Inventory Count Of Your Business

Taking a physical inventory count of your business is vital to ensure that you know what stock you have on hand. It can be beneficial when determining what needs to be ordered and when you may run out of products. Here are some tips on how to take a physical inventory count:

What Is A Physical Inventory Count And Its Importance:

A physical inventory count is an inventory counting method in which a business counts all the physical items in its stock. It contrasts with other ways, such as barcoding or RFID (radio-frequency identification), which use machines to track inventory levels.

Conducting physical inventory counts can be important for businesses for a few reasons:

Track Inventory On Hand

One of the most obvious reasons to take physical inventory counts is to keep track of what you have on hand. This information can be helpful in several ways, such as knowing when you need to reorder products and how much inventory you have on hand at any given time.

Prevent Losses:

Another reason physical inventory counts are essential is that they can help prevent losses. Knowing exactly how much inventory you have makes it easier to spot when something goes missing. This can help deter theft and other types of loss.

Satisfy Customers:

Physical inventory counts can also help ensure that you're able to satisfy customers. If you know what products you have in stock, you can avoid overselling and disappointing customers.

Accessible To Track Inventory:

Physical inventory counts are also relatively easy to track. Unlike other methods, such as barcoding and RFID, physical inventory counts can be conducted without expensive equipment.

How To Take A Physical Inventory Count Of Your Business

Now that we've gone over some reasons why physical inventory counts are essential, let's look at how to conduct one.

1. Prepare In Advance

Preparing in advance is the first step in taking a physical inventory count. This includes creating an inventory list and scheduling a time for the count.

2. Count Carefully

Once you're ready to start counting, do so carefully. This means taking the time to measure each item individually and double-checking your work as you go.

3. Check For Accuracy

After you've finished counting, it's essential to check for accuracy. It can do this by comparing your count against your inventory list and looking for discrepancies.

4. Update Your Records

Finally, don't forget to update your records once you've completed your physical inventory count. This will help ensure that your information is accurate and up-to-date.

Related: Inventory Control Procedures To Boost Sales

How To Take A Physical Inventory Count Of Your Business

Now that you know why physical inventory counts are essential let's examine how to conduct one.

1. Choose The Right Time

The first step in taking a physical inventory count is to choose the right time. You'll want to avoid times when your business is typically busy, as this can make it more difficult to count everything accurately. Instead, choose a slow time or schedule physical inventory counts for after-hours.

2. Gather Your Materials

Before you start counting, you'll need to gather all of the materials you'll need. This includes a pen and paper to keep track of your counts and any physical inventory count forms your business uses.

3. Count Your Inventory

Once you have everything you need, you can start counting your inventory. Be sure to calculate everything carefully and accurately, so you have an accurate picture of your stock.

Related: How To Calculate Ending Inventory For Your Online Store

4. Update Your Records

After you've finished counting, be sure to update your records accordingly. This will help ensure that your physical inventory count is accurate and up-to-date.

What To Do If Discrepancies Are Found During The Inventory Process

If you find any discrepancies while taking your physical inventory count, there are a few things you can do:

1. Check For Errors

The first thing you should do if you find discrepancies is to check for errors. This includes things like counting mistakes or mislabeled products.

2. Investigate The Discrepancies

You'll need to investigate the discrepancies if you cannot find any errors. This may involve talking to employees or looking at security footage to try and determine what happened.

3. Take corrective action

Once you've determined what caused the discrepancy, you'll need to take corrective action. This may involve changing your inventory procedures or taking disciplinary action against an employee.

Tips For Physical Counts of Inventory

There are a few things you can do to help ensure that your physical inventory count is accurate:

1. Keep A Running tally

One way to help ensure accuracy is to keep a running tally of your inventory levels. This can help spot discrepancies early on and make it easier to investigate what happened.

2. Conduct Regular Counts

Another way to maintain accurate records is to conduct physical inventory counts regularly. This will help ensure that your records are up-to-date and accurate.

3. Use Technology

You can also use technology to help you track your inventory levels. Things like barcoding and RFID can help keep track of your stock.

4. Label Boxes and Shelves

Be sure to label boxes and shelves clearly, so everyone knows where everything is supposed to go. This can help reduce counting mistakes and make it easier to find things when needed.

5. Choose a Suitable Warehouse

Choose a warehouse that is suitable for your needs. This includes things like having enough space to store your inventory and having the correct type of shelving.

6. Orient Staff

Ensure your staff is appropriately oriented to your physical inventory count procedures. This will help ensure they understand what needs to be done and how to do it accurately.

7. Train Staff

Properly train your staff on how to conduct physical inventory counts. This will help them understand the importance of accuracy and how to count your stock correctly.

8. Conduct Post Inventory Count

Make sure to conduct a post inventory count after completing physical inventory counts. This will help you catch any discrepancies that you may have missed.

9. Compare To Previous Counts

Compare your physical inventory count to previous counts to look for trends. This can help spot errors and investigate discrepancies.

10. Update Your Systems

Be sure to update your inventory management system after conducting physical inventory counts. This will help ensure that your records are accurate and up-to-date.


Are you looking for a more efficient way to track your inventory? Physical inventory counts are the best way to get an accurate picture of what you have on hand. Following these simple steps ensures that your store is always stocked with the products your customers want. Ready to take your business to the next level? Send us the inventory and create an Inbound in our software, and we'll handle the rest!

Recommended: Inventory Management Process Flow Made Easy

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