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Physical Inventory Cycle Count

Physical Inventory Cycle Count. Brent Ashcraft – BYU-Idaho ashcraftb@byui.edu 208-496-2213. The following are actual signs seen across the good ol' U.S.A.:. In the window of an Oregon store: Why go elsewhere and be cheated when you can come here? In a New York restaurant:

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Physical Inventory Cycle Count

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  1. Physical Inventory Cycle Count Brent Ashcraft – BYU-Idaho ashcraftb@byui.edu 208-496-2213

  2. The following are actual signs seen across the good ol' U.S.A.: • In the window of an Oregon store: • Why go elsewhere and be cheated when you can come here? • In a New York restaurant: • Customers who consider our waitresses uncivil ought to see the manager.

  3. The following are actual signs seen across the good ol' U.S.A.: • In a Los Angeles dance hall: • Good clean dancing every night but Sunday. • In the offices of a loan company: • Ask about our plans for owning your home.

  4. The following are actual signs seen across the good ol' U.S.A.: • On the wall of a Baltimore estate: • Trespassers will be prosecuted to the full extent of the law.—Sisters of Mercy • In a New York medical building: • Mental Health Prevention Center

  5. The following are actual signs seen across the good ol' U.S.A.: • On a display of "I love you only" Valentine cards: • Now available in multi-packs. • In a Maine restaurant: • Open 7 days a week and weekends.

  6. Topics of Discussion • Why Cycle Counts? • Specifics of How we Count • Other Related Accounting Procedures • Group Sharing of Ideas

  7. Why Cycle Counts? • Confidence in system stock-on-hand numbers • Identify Shrink Sooner • Discover Problems in Processes

  8. Confidence in Numbers • Schedule counts throughout the year • Allow buyers to request counts • Show reports of results to buyers before finalizing

  9. Identify Shrink Sooner • Post shrink 2 to 5 times a year – can see trends • Count high shrink potential items quarterly (technology) • Discover areas vulnerable to shrink • Discourage employee theft

  10. Discover Problems in Processes • Tagging Errors • Erroneous changes in stock on hand quantities DEI-STN or STS • Bar codes assigned to wrong SKU • Receiving errors or miscounts • Pricing errors

  11. How we Cycle Count • Assign responsibility to AP • Outline a schedule for the year • Use a procedure checklist • Do weekly counts • Keep reports

  12. Assign responsibility to AP • Accounts Payable Clerks do cycle counts after processing daily invoices • Two or more class codes can be counted in an afternoon • They follow schedule for the month • Accept requests from Buyers

  13. Outline schedule for year • Review all class codes for need • Determine how often to count based on value and quantity of inventory • Create a spreadsheet to track progress

  14. Use a procedure checklist • Create a procedure checklist for AP clerks • Checklist ensures that steps are not missed • Easy to train someone because they can follow the checklist

  15. Do Weekly Counts • Most weeks except for Rush and Buyback • Shooting for 5 to 15 class codes per week

  16. Keep Reports • Reports showing differences between count and system on-hand • Shrink reports

  17. Cycle Count Process Step by Step • Identify class(es) to count • Notify buyer and receiving department • Create PI session • Freeze stock on hand • Count using wireless Symbol scanners • Post count and run differences report

  18. Cycle Count Process Step by Step – cont. • Review count-to-freeze differences report to see what items need verified • Research unreasonable differences using additional system reports if necessary • Enter corrections using handheld or through PI menu option • Post corrections • Rerun count-to-freeze differences report

  19. Cycle Count Process Step by Step – cont. • Review final results with buyer • When confident the count is correct, run final process which adjusts all uncounted skus to zero. • Delete the PI session • Enter shrink into stock ledger (INV-21-06) • Update spreadsheet tracking record with count date and shrink amount

  20. Group Sharing of Ideas • Suggestions for improving Cycle Counting? • Is it feasible for all stores? • Do the benefits outweigh the costs? • Can cycle counting replace annual physical inventories?

  21. Other Related Accounting Procedures • Annual Physical Inventory • Stock Ledger Reconciliation • Daily review of stock changes, transfers, and price changes • Receiving and Shipping Controls • Discrepancy reporting • Accounts Payable processing of discrepancies • History Processing (Purging files)

  22. Textbook Loyalty Program • POS tracks textbooks by customer • Link in CO.CF file • Does not allow return unless in CO.CF as a sale • Cannot sell to store until last day of buyback (we pay 60%) • Buys back for store at 40% on the last day of buyback

  23. Physical Inventory Cycle Count Brent Ashcraft – BYU-Idaho ashcraftb@byui.edu 208-496-2213

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