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Inventory Count Procedure

The document outlines the steps for conducting a physical inventory count. Key steps include: 1) ordering tags and preparing the inventory in advance of the count, 2) freezing warehouse activities during the count, 3) using two-person teams to count and tag inventory items, and 4) entering tag information, investigating discrepancies, and evaluating the procedure after each count. The procedure is intended to ensure an accurate inventory count through preparation, control of activities during the count, and verification of count results.

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Erlene Compra
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2K views2 pages

Inventory Count Procedure

The document outlines the steps for conducting a physical inventory count. Key steps include: 1) ordering tags and preparing the inventory in advance of the count, 2) freezing warehouse activities during the count, 3) using two-person teams to count and tag inventory items, and 4) entering tag information, investigating discrepancies, and evaluating the procedure after each count. The procedure is intended to ensure an accurate inventory count through preparation, control of activities during the count, and verification of count results.

Uploaded by

Erlene Compra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ANNEX A

InventoryCountProcedure
Itisnecessarytoperiodicallyconductacompletecountoftheinventory(knownasaphysicalcount).Thisis
usuallydoneattheendofamonth,quarter,oryear,tocoincidewiththeendofareportingperiod.
Thestepsintheprocessareasfollows:
1. Order count tags. Order a sufficient number of twopart count tags for the amount of inventory
expectedtobecounted.Thesetagsshouldbesequentiallynumbered,sothattheycanbeindividually
trackedaspartofthecountingprocess.
2. Previewinventory.Reviewtheinventoryseveraldaysinadvanceofthescheduledinventorycount.If
therearemissingpartnumbers,orifitemsappeartobeinaconditionthatwouldbedifficulttocount
(suchasnotbeingbaggedorboxed),notifythewarehousestafftomakethenecessarycorrections.
3. Precountinventory.Gothroughtheinventoryseveraldaysinadvanceandcountanyitemsthatcanbe
placedinsealedcontainers.Sealtheminthecontainersandmarkthequantityonthesealingtape.This
makesthecountingtaskmucheasierduringtheactualcount.Ifasealisbroken,thenacountingteam
willknowthattheyneedtorecountthecontentsofacontainer.
4. Completedataentry.Ifthereareanyremainingdataentrytransactionstobecompleted,dosobefore
the physical inventory count begins. This includes transactions for issuances from the warehouse,
returnstothewarehouse,andtransfersbetweenbinlocationswithinthewarehouse.
5. Freezewarehouseactivities. Stopall deliveries from the warehouse, and alsosegregate all newly
receivedgoodswheretheywillnotbecounted.Otherwise,theinventoryrecordswillbeinastateof
fluxduringtheinventorycount,andsowillnotbeentirelyreliable.
6. Instructcountteams.Assembletwopersonteamstocounttheinventory,andinstructthemintheir
countingduties.Thesedutiesinvolvehavingonepersoncountinventorywhiletheotherpersonmarks
downtheinformationonacounttag.Onecopyofthetagisaffixedtotheinventory,whiletheteam
retainstheothercopy.
7. Issuetags.Aninventoryclerkissuesblocksofcounttagstothecountteams.Eachteamisresponsible
forreturningaspecificnumericrangeofcounttags,whetherornotthetagsareused.Maintaining
controloverallcounttagsensuresthatlosttagswillbeinvestigatedpromptly.
8. Assigncountareas.Assignaspecificrangeofbinstoeachcountteam.Notetheselocationswitha
highlighteronamapofthewarehouse.Theinventoryclerkshouldmaintainamasterlistofwhichareas
ofthewarehousehavebeencounted,andwhichteamshavebeenassignedtoeacharea.
9. Countinventory.Onepersononeachteamcountsaspecificitemwithinabinlocation,andthenthe
otherpersonmarksthebinlocation,itemdescription,partnumber,quantity,andunitofmeasureona
counttag.Theteamaffixestheoriginalcopyofthetagtotheinventoryitem,andretainsthecopy.
10. Verifytags.Uponcompletionofacountarea,eachcountteamreturnstotheinventoryclerk,who
verifiesthatalltagswerereturned.Iftherearemorewarehouseareastobecounted,assignanewarea
tothecountteamsandissuethemnewblocksofcounttagsasnecessary.
11. Entertaginformation.Entertheinformationonthecounttagsintoanonlinedataentryform.Oncedata
entryiscompleted,printareportshowingalltagnumbersentered,sortedbytagnumber,andlookfor
anygapsinthenumbers.Investigateanynumberinggapsfound.Thiswillensurethatallcounttags
issuedwereincludedinthefile.

ANNEX A

12. Investigateunusualresults.Resorttheinventoryreportseveralwaystolookforunusualinformation,
andinvestigatethetagentryassociatedwitheachone.
Itmaybeusefultoevaluatethisprocedureaftereverycount,toseeiftheprocedureshouldbealteredto
compensateforcountingissuesexperienced.

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