How to verify you inventory count in Microsoft Dynamics 365 We’ve written a couple of articles recently about inventory counting best practices using Dynamics 365. For quick reference you can find them here:
- Which Annual Inventory Counting Method Should You Use?
- 6 Steps to prepare for a wall-to-wall inventory count
Is your inventory count accurate? As you reach the stage in your physical inventory process where the counts are being turned in, there are 4 questions you need to ask and answer – and you need to do it in this order. Each question should have policies attached to them so your inventory count processes stay consistent over time.
- Did everything get counted?
- What should we recount?
- How can we compare the actual count to what our system has recorded in it?
Let’s examine each of these questions in more detail.
Question 1: Did everything get counted? Each method of inventory counting has its own method of inventory count verification. Directed Count – Use visual aids. Using the cycle count journals within Dynamics 365, you would give each user a list defined by area, zone or location. Only print the items that are shown to be in those areas. The best way to verify that all items have been counted is to use a visual aid such as a “sticky dot.” You would verify accurate counting by walking through that zone and visually verifying that every item is marked with the sticky dot.
TIP: Make sure you have a policy for handling “found” items that are not listed.
Blind Count – Use tags. If you are performing a blind count using tags, we recommend you use tags where a perforated piece is left with the item counted and the piece returned is numbered so that you know what numbers were handed out to each counter. By doing this, you can utilize the tag counting functionality found within Dynamics 365 and mark tags as being returned, missing or damaged. Obsolete / Slow Moving Inventory – Decide on write off. How many times does a business have to count the same thing, yearly, before it is determined that these items are (1) taking up needed space and (2) costing the business money to keep them on hand and maintain them on the financial books? Evaluate whether you want to write this inventory off.
Question 2: What should we recount? Before your initial physical count begins, determine appropriate tolerances to determine when something requires a recount? You can set either a dollar tolerance or a quantity tolerance. Either way, recounts will occur when this tolerance level is reached. If you have chosen to utilize tag counting or cycle counting journals, once lines are in the cycle count journal, recounts can occur both prior to posting and / or by posting the original sheet and generating a new sheet for the same item(s) / location(s). This should be an established procedure you have previously tested and determined.
Question 3: How can we compare what we counted to what our system shows? To verify your wall-to-wall inventory count to the inventory numbers in Dynamics 365, you would want to run a report showing the net change caused by counting journals (counting or tag counting). When using Tag Counting journals, you can run the posting process in “Simulation” to get the net change in count, however, this does not give you the net change in inventory value.
For the Counting journals, prior to posting you can run Print> Journal to get the On-Hand vs. Counted quantities. This report does list the Cost price. In addition, one could export the results to Excel of the counts being compared to the original on hands and run formulas from there.
Returning to regular use of Dynamics 365 Your final question might be, “When will we return to regular use of our system?”. Once you have run your physical inventory count, verified its accuracy and made any needed adjustments in the system, only then should you re-open your system to allow for normal transactions to occur. If you need any help with this process, please reach out to the MCA Connect Dynamics 365 Managed Services team.
Author: Genie Engels