Physical inventory counting in practice

Counting is the check that decides whether stock in BC matches the shelves. There are two ways to do it: the physical inventory journal and physical inventory orders with recordings. They suit different tasks. Here you see how each method works, what must happen with locations that have bins, and how you keep track of the items that must be counted more often. You also get a short guide to counting the most important items more often than the rest.

The journal for simple counts

The Phys. Inventory Journal suits cases where few people count and the location does not use directed put-away and pick. You run Calculate Inventory, which creates lines with the expected quantity. The Qty. (Phys. Inventory) field is by default set to the same value as the calculated quantity, so you only correct the lines where the count differs. Print the counting list and let the employees count.

Keep the original lines

Microsoft Learn warns that you must not calculate the expected quantity again when the lists come back after a few days. The stock may have changed. Therefore keep the original journal lines. If you need several lists, for example for several locations, create separate journal batches. If you found items that are posted to the wrong location, the difference should not go into the journal. Use an item reclassification journal or a transfer order.

Counting orders for several counters

Physical inventory orders give more control and are made for several employees. The flow is:

Create an order, and run Calculate Lines with filters on part of the stock.
Make one or more recordings (Make New Recording), and choose Only lines not in recordings, so two people do not count the same thing.
Enter the quantity on the recording, mark each line as Recorded, and choose Finish.
Finish the order, check the differences on the report, and post.

Limitations

Counting documents cannot be used for items in bins or for warehouse entries. If you use zones, you cannot use physical inventory orders. Here you must instead use the warehouse physical inventory journal. For locations with directed put-away and pick, you count in the warehouse journal, post with Register, and then run Calculate Whse. Adjustment in the item journal to synchronize with the item ledger entries. Count the item in every bin where it is stored. For tracked items you must record the quantity per lot or serial number.

Count important items more often

Create counting periods, and assign them to items in the Phys Invt Counting Period Code field. Then run Calculate Counting Period in the journal, so BC shows the items that are due to be counted. This gives a continuous check instead of one big annual count.

After posting

Posting creates item ledger entries and physical inventory ledger entries, which you can see on the item card. Remember to assess the item's value after an adjustment. Use Preview Posting before you post a large order.

Choosing a method

If you count few items and only one employee is involved, the journal is quickest. If you need to count the whole warehouse with several people, and you want to know who counted what, orders and recordings give more control. The system ensures that an item is not counted twice.

If you have individual discrepancies outside a count, you can use Adjust Inventory on the item card for one item, or an item journal for several. It is quick, but does not give the same documentation as a count.

Next steps

Addverk builds its own apps for Business Central, but they are not on Microsoft AppSource yet. On the apps page you can see what we are working on. If you want help with the setup in standard BC, you will find the services and the open prices on the prices page.