Physical inventory and cycle counting

Manufacturing organizations must accurately track inventory to:

• Maintain accurate stock counts.
• Maintain the general ledger values associated with inventory, which includes finished goods, components, and raw material. These items are available for use and may be owned by your company or entrusted to you by another company. When you issue inventory to specific job orders; the issued item is removed from inventory and its costs become part of some work in process.

You can conduct a physical inventory annually to count your entire inventory or opt for cycle counting to distribute the counting process throughout the year. Cycle counting employs rules that you define to determine when specific items should be counted. When an item meets a rule, Made2Manage includes it on a worksheet of items to count. Cycle counting rules can be based on the following variables:

• A defined time period.
• An on-hand quantity falling below a specific level.
• Item usage exceeding a maximum or dropping below a minimum.
• A statistical sampling of your inventory.

When counting parts, discrepancies may arise between your counts and the on-hand inventory in Made2Manage. You can adjust the on-hand figures to reflect your actual inventory quantities. Employees conducting physical inventory use multi-part tags to record their counts, and adhere a copy of the tag to the part or location to indicate it has been counted. Made2Manage’s optional bar code system, applicable for both physical inventory and cycle counting, simplifies the process of recording count information.

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