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Physical Inventory Cycle Count. Brent Ashcraft – BYU-Idaho ashcraftb@byui.edu 208-496-2213. The following are actual signs seen across the good ol' U.S.A.:. In the window of an Oregon store: Why go elsewhere and be cheated when you can come here? In a New York restaurant:

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physical inventory cycle count

Physical Inventory Cycle Count

Brent Ashcraft – BYU-Idaho

ashcraftb@byui.edu

208-496-2213

the following are actual signs seen across the good ol u s a
The following are actual signs seen across the good ol' U.S.A.:
  • In the window of an Oregon store:
    • Why go elsewhere and be cheated when you can come here?
  • In a New York restaurant:
    • Customers who consider our waitresses uncivil ought to see the manager.
the following are actual signs seen across the good ol u s a3
The following are actual signs seen across the good ol' U.S.A.:
  • In a Los Angeles dance hall:
    • Good clean dancing every night but Sunday.
  • In the offices of a loan company:
    • Ask about our plans for owning your home.
the following are actual signs seen across the good ol u s a4
The following are actual signs seen across the good ol' U.S.A.:
  • On the wall of a Baltimore estate:
    • Trespassers will be prosecuted to the full extent of the law.—Sisters of Mercy
  • In a New York medical building:
    • Mental Health Prevention Center
the following are actual signs seen across the good ol u s a5
The following are actual signs seen across the good ol' U.S.A.:
  • On a display of "I love you only" Valentine cards:
    • Now available in multi-packs.
  • In a Maine restaurant:
    • Open 7 days a week and weekends.
topics of discussion
Topics of Discussion
  • Why Cycle Counts?
  • Specifics of How we Count
  • Other Related Accounting Procedures
  • Group Sharing of Ideas
why cycle counts
Why Cycle Counts?
  • Confidence in system stock-on-hand numbers
  • Identify Shrink Sooner
  • Discover Problems in Processes
confidence in numbers
Confidence in Numbers
  • Schedule counts throughout the year
  • Allow buyers to request counts
  • Show reports of results to buyers before finalizing
identify shrink sooner
Identify Shrink Sooner
  • Post shrink 2 to 5 times a year – can see trends
  • Count high shrink potential items quarterly (technology)
  • Discover areas vulnerable to shrink
  • Discourage employee theft
discover problems in processes
Discover Problems in Processes
  • Tagging Errors
  • Erroneous changes in stock on hand quantities DEI-STN or STS
  • Bar codes assigned to wrong SKU
  • Receiving errors or miscounts
  • Pricing errors
how we cycle count
How we Cycle Count
  • Assign responsibility to AP
  • Outline a schedule for the year
  • Use a procedure checklist
  • Do weekly counts
  • Keep reports
assign responsibility to ap
Assign responsibility to AP
  • Accounts Payable Clerks do cycle counts after processing daily invoices
  • Two or more class codes can be counted in an afternoon
  • They follow schedule for the month
  • Accept requests from Buyers
outline schedule for year
Outline schedule for year
  • Review all class codes for need
  • Determine how often to count based on value and quantity of inventory
  • Create a spreadsheet to track progress
use a procedure checklist
Use a procedure checklist
  • Create a procedure checklist for AP clerks
  • Checklist ensures that steps are not missed
  • Easy to train someone because they can follow the checklist
do weekly counts
Do Weekly Counts
  • Most weeks except for Rush and Buyback
  • Shooting for 5 to 15 class codes per week
keep reports
Keep Reports
  • Reports showing differences between count and system on-hand
  • Shrink reports
cycle count process step by step
Cycle Count Process Step by Step
  • Identify class(es) to count
  • Notify buyer and receiving department
  • Create PI session
  • Freeze stock on hand
  • Count using wireless Symbol scanners
  • Post count and run differences report
cycle count process step by step cont
Cycle Count Process Step by Step – cont.
  • Review count-to-freeze differences report to see what items need verified
  • Research unreasonable differences using additional system reports if necessary
  • Enter corrections using handheld or through PI menu option
  • Post corrections
  • Rerun count-to-freeze differences report
cycle count process step by step cont19
Cycle Count Process Step by Step – cont.
  • Review final results with buyer
  • When confident the count is correct, run final process which adjusts all uncounted skus to zero.
  • Delete the PI session
  • Enter shrink into stock ledger (INV-21-06)
  • Update spreadsheet tracking record with count date and shrink amount
group sharing of ideas
Group Sharing of Ideas
  • Suggestions for improving Cycle Counting?
  • Is it feasible for all stores?
  • Do the benefits outweigh the costs?
  • Can cycle counting replace annual physical inventories?
other related accounting procedures
Other Related Accounting Procedures
  • Annual Physical Inventory
  • Stock Ledger Reconciliation
  • Daily review of stock changes, transfers, and price changes
  • Receiving and Shipping Controls
  • Discrepancy reporting
  • Accounts Payable processing of discrepancies
  • History Processing (Purging files)
textbook loyalty program
Textbook Loyalty Program
  • POS tracks textbooks by customer
  • Link in CO.CF file
  • Does not allow return unless in CO.CF as a sale
  • Cannot sell to store until last day of buyback (we pay 60%)
  • Buys back for store at 40% on the last day of buyback
physical inventory cycle count23
Physical Inventory Cycle Count

Brent Ashcraft – BYU-Idaho

ashcraftb@byui.edu

208-496-2213