Warehouse Cycle Counting with Business Central
What is cycle counting?
Let’s be honest, setting up and processing inventory counts on a regular basis is one of the least exciting parts of running a distribution business. In reality, there is no one who enjoys undertaking this tedious activity. In fact, rather than addressing this need, many choose to ignore it, especially if they have a lack of resources and time. However, performing cycle counts on a frequent basis and aligning them correctly within your warehouse(s) is critical in achieving better metrics for inventory accuracy, turnover ratio, lead times and delivery dates. In this blog, we’ll explain how all of this can be accomplished using Microsoft Dynamics 365 Business Central (BC) with its ease of processing a count.
Warehouse cycle counting is a perpetual counting system where a small subset of inventory, in a specified location, is counted on a specified day. By performing cycle counts, you are regularly validating the accuracy of the inventory in your system. This method of counting is popular among many companies that have a huge number of items in inventory and cannot afford to close for a long enough period of time to perform an annual physical inventory count.
Here are the main highlights involving a cycle count as we look at the process in BC:
First, define the Counting Periods in the Physical Inventory Counting Periods Page.
Next, in the Item Card, Warehouse Tab, define the Counting Period.
Once these are done, you can start the count process as below:
Go to Warehouse –> Inventory –> Tasks –> Physical Inventory Journals
Select Actions –> Functions –> Calculate Counting Period
Select the items you want to count using SEARCH filter on top and input, for example, FAST for Counting Period and use 3 dots icon on line (to select all or multiple items) and hit OK.
Print the Counting Sheet with or without current Qty in System.
After the counts have been completed, enter the Qty from the actual count and the adjustment quantity will appear.
Go to Post/Print and select Post. This will post the adjustment to the quantity on hand. This action results in new Ledger Entries as well.
A must for manufacturing and distribution
In conclusion, performing cycle counts at your warehouses using Microsoft Dynamics 365 Business Central is pretty simple and can even be made easier when using a mobile device that is integrated with BC. Before any counts can be processed, it is imperative that your items are properly configured in the system. By doing this, you can vastly improve distribution challenges such as late shipments to customers, out of stock items, and lack of accurate data with 3PLs. Lastly, not only does cycle counting improve accuracy of the count, but this process improves inventory turnover by giving buyers insight into what items should continue to be stocked and at what rate – which will then help with more sales opportunities.
If you’d like to talk best practices related to item configuration or warehouse cycle counting, let us know! And if you’d like to learn how cloud ERP Microsoft Dynamics 365 Business Central can propel your manufacturing or distribution business forward, just ask.