Read Time: 4 minsUnbelievably, counting—a simple aspect of inventory management—is the key to it all. Retailers can learn important information from inventory counts about the difference between their on-paper and actual stock levels. Or, the precision of an inventory.
Cycle counting is one of the most helpful inventory counting methods for merchants out of all the ones available. Here’s a closer look at how cycle counts can enhance the way you manage your inventory.

Cycle Count VS Physical Inventory
The most thorough (and laborious) option is a 100% physical inventory count. It’s a beast that frequently necessitates a partial or complete shutdown of operations to examine every detail and deal with every inconsistency. Physical inventories take a lot of time, are disruptive to corporate operations, and are challenging to plan for.

Inventory Count
To identify the amount of inventory on hand and address any inconsistencies, a physical inventory count is a high-effort inventory counting technique. Typically, a physical inventory is conducted near the conclusion of a reporting period.

Full inventory counts’ amiable, laid-back relative is the cycle count. Cycle counting is being used by retailers of all sizes as a practical substitute for the traditional physical inventory count. Cycle counting is a partial audit approach wherein only a portion of the entire inventory at a particular location on a certain day is counted.

The procedure can be carried out continually with the use of mobile devices, barcode scanning, and inventory management software, with the ultimate goal of using up all of the stock without ever having to stop business activities.

Cycle Count
Cycle Count On a daily, weekly, or monthly basis, smaller pieces of inventory are counted using cycle counts. As part of their regular duties, workers will use this procedure to gradually move through the stock, addressing any irregularities along the way, until the entire audit has been completed.
The cycle count, sometimes referred to as the “partial stock take,” can be done once a day or once a week. It’s more subdued than a physical count but still kind of like “gradually chip away at it” approach. Cycle counting really performs just as well—if not better—than physical counts in ensuring inventory correctness.
If done correctly, it may completely eliminate the need for full inventory counts.

Why you need cycle counts
Any shop should be delighted that cycle counts offer a practical substitute for physical inventories. No more Physical inventories, then?
Cycle counts give this a good chance of happening. Eliminating physical counts is just one of the numerous advantages of this approach, though:

1.Reduce your operating costs: Physical counts can cause expensive company delays and need paying personnel overtime to conduct the actual count, for example. Cycle counting is a routine element of business.
2. Increase inventory accuracy: By performing routine cycle counts, you can identify inconsistencies and take action before they worsen and become intractable.
3. Reduce carrying costs for inventory: A warehouse’s first aim is to keep carrying expenses to a minimum. Reducing the amount of physical inventory, you need to have on hand is one of the main advantages of better inventory accuracy.
4. Capture revenue: Revenue loss due to inaccurate inventory will always occur. Recall the dreadful circumstance where a consumer places an order but you have nothing to ship? If there is a disparity in your inventory, it may prevent you from fulfilling orders on time and create a customer service nightmare.
5. Identify the source of any inventory problems: Historical cycle counting data can over time disclose trends regarding typical disparities or inventory problems. For instance, you can analyze utilizing historical data to identify the reason why a particular warehouse consistently has shrinkage during a particular time of year.

Cycle counting best practices
We advise following the following best practices to make the most of cycle counting:

1. Work cycle counts into daily operations: Many merchants arrange cycle counts early in the day, before the daily commotion in the warehouse begins. Giving the staff enough time to count is crucial, but so is rewarding excellent inventory accuracy. It is best to assign knowledgeable employees to perform routine inventory counts.
2. Count regularly: Improved inventory accuracy is closely correlated with the frequency of cycle counts. Plan cycle counts on an ongoing basis, ideally daily.
3. Use blind cycle counting: Your counter should not be aware of the inventory that should be on hand in order to increase count accuracy. If the counter is aware of what ought to be there, there is a very high possibility that they will be biased or lazy. The warehouse manager or supervisor will review the results after the counter has finished counting and presents them to them.
4. Utilize double-blind cycle counting: If a count is inaccurate, a new counter is sent out to recount the discrepancy in the inventory. Once more, this new counter has no idea what the prior counter counted or what the inventory levels should be. The sole responsibility of the counters is to report their findings, and depending on those findings, the next course of action (inventory adjustment, no change, etc.) will be decided.
5. Look for areas where you can improve: You should attempt to quickly resolve differences using reporting and analytics. Cross-referencing records to discover patterns that may be generating shortages, inconsistencies, or losses is crucial in the long run, especially for larger shops, to find the source of inventory issues. By doing this, you can address staff training problems and processes that are prone to errors as soon as feasible.
6. Utilize mobile devices, barcodes, and cycle counting software in conjunction: Cycle counting can be automated to increase both frequency and precision. Additionally, audit reports can be produced by inventory management software to indicate what went wrong, who was in charge, and where.

When just using manual procedures, adhering to cycle counting best practices can be difficult. The strength of inventory management software lies in this. Inventory software can generate the data required to make more informed inventory decisions in addition to simplifying the actual counting process when used in conjunction with mobile devices and barcode scanning. Cycle counting has the ability to significantly increase the efficiency of warehouse inventory cycles, despite being just one of many inventory counting techniques. It can significantly benefit your efforts to improve quality assurance and customer satisfaction overall when used in conjunction with the appropriate procedures and software.