Physical Inventory Counting
Counting Inventory is an important process that reconciles your Artisan inventory with your actual physical inventory. Throughout the process of running your business various activities can introduce discrepancies in your actual count. Even the most diligent retailers will have discrepancies occasionally. Artisan can help make the counting process much easier, faster, and accurate.
There are 6 major steps to complete the process:
- Prepare for Inventory Counting
- Enter Inventory Counts
- Review Entered Counts & Make Adjustments
- Accept New Counts
- Zero Out Items w/o Recent Counts
- Print Reports
BEFORE You get started counting you should make sure that you are running Artisan POS 4.4.54 or later. There have been critical program updates that are required before you count your inventory. Please email or call support if you do not have this version.
AND Remember we strongly recommend that you make a backup throughout this process!
This step can be very quick or it could take some time, so we recommend that you get this step out of the way before the day you plan on counting.
The gist of this step involves setting up a laptop station or printing tally sheets and making sure all the outstanding transactions that have happened in the real world have happened in Artisan.
- The most important is to make sure you don’t have any Pending Stock Corrections. Make Sure you reconcile these before accepting your counts. If you don’t then Artisan will assume that all these corrections are correct and clear them out for you. Remember that if you don’t like the Pending Stock Corrections feature, you can turn it off in settings. Turning it off will also accept all the pending corrections.
- You should also handle any other outstanding transactions, for example if you have received inventory and put merchandise on the floor without actually receiving it in the system, you should receive it first. Otherwise you may count those items and then later add the amount you just received on top of the correct total giving you an inflated inventory. Obviously it is always better to receive merchandise before you put it out for sale, but sometimes this is not possible. If you have new shipments that you don’t want to count, then just leave them aside until after your inventory is complete, then receive them.
- Similarly, make sure your Order Status is up to date. If you have any Layaways, Special Orders, or Internet Orders that have been taken out of inventory (and given to the customer) but not yet marked Delivered, mark them delivered now.Click on Order Status from the Main Menu, then Special Orders & Custom Orders.
- Counting in One Session vs. Counting In Batches?
This is a very important question and you must know the answer before you proceed. If you have a small store and you think you can count everything within one day, then you should count in One Session. If you store is larger and you have to interrupt your counting to conduct sales for a day or week, then you can instead Count in Batches. The downside of counting in batches is that you need to count all the units of the same item in the same session so that Artisan can combine the totals. See details.
For example if you scan one of an item in the front of the store, then accept your counts, and then later you scan one of the item in the back of the store, this will enter a total of ONE for this item and is probably not what you want.
The normal, One Session, process works like this:
- The First Day: Count
- Additional Day(s): (as needed), Count,
- Accept Counts, Reset Uncounted Items
- Run Reports
The batch process works like this, say you are counting on 3 consecutive Sundays:
- The First Sunday: Count, Accept Counts
- Normal operation for the rest of the week
- The 2nd Sunday, Count, Accept Counts
- Normal operation for the rest of the week
- The 3rd Sunday, Count, Accept Counts
- Use the red Zero Uncounted button to zero out uncounted items before a specific date. Use the date of the first Sunday.
- Run Reports
Should I Close The Store While Counting?
This is a hard question. Counting inventory when the store is closed is always more accurate because it is difficult to know if something that was sold was counted. You would need to run a sales by item report at the end of the day and re-count all the items on the list. Update your counts for these items before you open the next day. Another reason to close your store while doing inventory is just general confusion and distraction. Physical Inventory is challenging and you really need to pay attention to the whole process. Customers can easily distract those who are counting and those who are managing.
If you can do it on a day you would normally be closed, that is best. If you are open 7-days, then closing on your slowest day is something you should consider.
On the other hand… we realize that there may be a large loss of revenue and customer good will if you close. You have to balance these needs with the need for an accurate inventory. A mostly accurate inventory is much better than none at all.
5. Setting Up a Laptop
For the laptop we can install Artisan on the laptop and point the data to the server. This station will be live on the network. The laptop should be running Windows 7 or better and be a decent speed with a good wireless network. It is much better if the laptop has a numeric keypad as shown on the keyboard below. It should have an available USB port so that you can connected your scanner from the register or receiving station temporarily. Make an appointment for the tech support team to assist you. Please allow plenty of time (sometimes wireless networks can be challenging) to get this setup before your team arrives to help you count your inventory.
Enter Inventory Counts
Artisan stores the total amount of units that have been counted separately from the current quantity on hand you see in the item record and list. You can enter counts from multiple areas in your store and the quantity counted will add from each area if you do it correctly.
The easiest way to do this is the scan mode, using Inventory Counts Screen and the aforementioned laptop and scanner.
If you already have some counts you want to clear out you can click on the Reset Counts button at the top right and corner. When you have counts, this button will be red.Please be careful, you can erase all your counts if you are not careful! You will be prompted to confirm your selection.
Press F8 or click on Scan Mode.
Now you can scan your items. As you scan you will see them add at the top of the list and continue down. Notice that as you scan the total Units Counted and the total Unique Codes are incremented. This is to assist accuracy so you can perform a secondary quick count of a small section and see how it compares to these totals. Once you Process/Save this screen, the counters are reset back to zero.
For example, you could pick a display shelf and you scan all the items on the shelf. A quick visual count of the items shows 45 items, with some of them being duplicates. When you scan them with the scanner if the Units Scanned does not equal 45 then you are off somewhere. You can do a visual recount as necessary. If the scanning is off, you can start over for this section by closing this screen and abandoning this small group of scans.
In the Scan Mode, just like in the Sales Screen, you can use the Numeric Plus (+) key (on the right side of your keyboard) to add one quantity to the highlighted record. You can use numeric Minus (-) to subtract 1 or you can use the numeric multiply or asterisk (*) key to prompt you for the quantity.
If your keyboard doesn’t have a numeric keypad, you can use Ctrl-I (Increase), Ctrl-R (Reduce), and Ctrl-Q (Quantity) instead.
Scanning each and every item is the most accurate way of counting. If you scan the same item twice with another item in between you will get a new line of the new scan. The totals will be combined when you click on process. Process is the same thing as Save. Once you scan enough lines you will get a scroll bar so you can review all your scans as needed.
You can have as many scanning sessions as you need. The totals will always combine in this mode.
If you need to edit a scan, highlight the one you want to change and press the numeric asterisk or multiply key (*) as shown above in the keyboard diagram. To delete an entry, press Alt-D or click on the Delete Scan button.
Once you click process you will go back to main Counting Screen. Notice you now see the total number of items you have counted (shown below). You also see the Reset Counts button. ONLY use this button if you need to START OVER!
Typing into the Scan Mode
If your items don’t have bar codes or if you are using Tally Sheets you can type in your entire item code in the box at the bottom. You can also type in the Artisan Barcode, the Vendor’s Part Number (Style Number), or UPC, or any extra code you may have that is stored in the proper item record fields. Please note that if your item codes or part numbers have a “-” or “+” in them, then you will need to type them in with the keys above the letters. The keys to the right are used to effect the quantity.
Scanning on Multiple Computers
As long as you are in SCAN MODE, you should be able to scan on multiple laptops and stations without any issues. The main counting screen does not add, so be careful if you are entering from multiple locations or one station could end up overwriting the data put in from another station. You should Process/Save your work frequently and do that from each station, especially if you take a break. Remember that once you are complete with each computer or laptop you should exit the physical counting screens. DO NOT ACCEPT COUNTS FOR EACH STATION – You normally only accept counts once unless you are counting in batches. When you are counting in batches then you should only accept counts once per day or per vendor, category, or other grouping.
Counting In Batches
For accurate counts, it is better to make a complete sweep through your store, not skipping much. However, sometimes you need to do a spot check on a particular group of items such as a Vendor. Use the scan mode or whatever method to enter the counts of the group. Then select All Items and then filter on the vendor or whatever. The goal is to reset the items to zero that you didn’t count, but only within this particular group. After you have filtered to match your group, then you can zero out the uncounted ones by selecting Zero Uncounted Items.
Choose the default option to honor your filter and ONLY zero out the matching items. This function will convert the Not Counted items to zero, just as if you had entered in a count of zero. Remember that zero is an acceptable count. After you have reviewed the counts, including the zeros, then you can Accept All Counts and it will update the inventory for all the items you have counted. Only the Zero Uncounted Items has the option to honor the filter. Reset counts and accept counts processes all your item records. Set the date to the current date.
Using a Portable Data Terminal (PDT) or smart device to collect inventory counts.
These tools are planned for a future release.
Using Tally Sheets (Print Tally Sheets from Inventory Count Screen)
Sometimes it might be easier to just pull out pen and paper. Artisan can print tally sheets that optionally includes the expected quantity on hand for normal counting or without the expected count for Blind Counting. Blind Counting is used when you want to make sure that nobody is sleeping through the inventory and just checking it off or if you are concerned about employee theft.
The easiest way of entering from the Tally Sheets is to make sure the items printed on the sheets are in the same order as the items in the Inventory Counting Screen. Then when you finish entering one item, you are automatically moved down to the next one. If instead you are randomly searching around, it will take you much longer. The best approach is to print ONE SET of Tally Sheets and divide those pages among your group and enter the completed sheets from one or more stations. As long as you are not editing counts for the same item on multiple computers you can divide up the data entry process as well. Make sure you print your Tally Sheets with the “No Grouping” option selected.
If you want to print multiple copies of the entire tally sheets and do the data entry from multiple stations, then they only way is to use the scan mode and type in the item code or the vendor’s part number completely. Artisan will find the item and then you can update the count with the multiply key (numeric *). The plus and minus keys also work as described above. Please note that if your item codes or part numbers have a “-” or “+” in them, then you will need to type them in with the keys above the letters.
Review Entered Counts & Make Adjustments
IMPORTANT! To review what you have counted and to see exceptions to what you have counted, there is a pull-down menu on this same line. From the pull-down menu you can filter the list of items to just show the Exceptions Only (Count does not match QOH), Exceptions, Including Uncounted as Zero, and All Counted Items.
The Exceptions Only (Count does not match QOH) choice will show you only items that you have counted and only those that the total counted does match the expected quantity (the current quantity on hand).
The Exceptions, Including Uncounted as Zero choice will show you any count that does not equal the expected quantity (the current quantity on hand) including those that are not counted (indicated by “Not Counted” in the list) and where the expected count is not zero.
The All Counted Items choice shows all items with an inventory count regardless of whether the count matches the expected count or not.
Additional searches, sorts and filters may be applied using the standard filtering tools and the Show Power Search button.
Inventory Count Report
There is an important report that you should run when you are ready to see how the inventory counts that you have entered would effect your inventory values if you were to accept your counts now. From the Reports Menu, choose Inventory Reports, and then Inventory Count Report.
This report shows what your inventory value is currently, what the counted values are, and what the differences are between the two and how much your inventory value would change if you accepted your counts now. This is important to know so that you don’t make mistakes by omitting large groups of items during your counting if your would be inventory value is way off from what you would expect.
The above is an example of a small sample of counted items using sample data. Note that there are plenty of options on which items you show on the report. For example you can filter out consignment items if you want. You should export a copy of this report to PDF just before you accept your counts for your records.
Please see also the REPORTS section at the end of this article.
If you need to edit an entry after you have processed the scan, you can do this from the main Counting Screen (shown above) by highlighting the item you want to edit and press Enter. You will be prompted to enter the new quantity. This is now the actual counted total you are editing. This total will not be added to another total, this is the total. If you edit the total and then go back to scan mode and scan this item then those scans will be added to the current total. Again you want to edit as little as possible. Scanning each and every item is the most accurate way of counting. Often times mistakes are introduced when you second guess the scanning process. Sometimes units get separated in your store. For example you have a group of items all together and you count 6. While somewhere else in the store there is another on of those same units and you scanned it too, now giving you 7. When you audit your counts and go discover the 6, and you don’t see the 7th one and you edit the total back to 6 thinking that you miscounted. So now your ending count for this item will be wrong by 1.
In the Counting Screen you can also use the numeric keypad shortcuts, plus, minus, and multiply. You can also press enter on any item and then edit the quantity like you pressed the multiply key.
You can also edit entries by using the F4 Edit This Record button or key. This method will also show you more details about the item record, but you are not able to edit anything but the count.
Mark Items Uncounted
If you need to individually mark an item uncounted, you can do so one record at a time by using the Ctrl-N Mark Uncounted key or button to mark items Uncounted. At this time there is no way to mark a group Uncounted, its either all items or one at a time.
Accept New Counts
Accepting your counts is the goal of the entire operation. This critical step replaces your item quantity on hand (QOH) with the quantity counted. It also resets the quantity counted to uncounted. Any discrepancy in the QOH and the Quantity Counted will be entered as an inventory correction and labeled “Shrinkage” for items that have had a reduction in inventory. Items with an increase are entered as an adjustment.
For example if you scan one of an item in the front of the store, then accept your counts, and then later you scan one of the item in the back of the store, this will enter a total of ONE for this item and is probably not what you want. This is why we don’t recommend counting in batches unless you absolutely have to.
When you initiate accepting counts you will be prompted to confirm your action.
You will then be asked how to handle Uncounted Items.
Basically there are two methods of counting. You can either count everything in your store in a short period of time or you can count in batches. Counting everything in a short period of time, say one day, or over a weekend is the normal way. We recommend this method. However sometimes the ideal isn’t possible because you either have a large store or you can’t close the store to perform inventory. In this case you can Count in Batches, which is defined by accepting counts multiple times.
Either way, the key is to not only fix the counts of items that are wrong, but to also fix the items that Artisan thinks you have that you really don’t. If something is damaged or stolen and Artisan does not get informed, then it will show that item in stock. During a physical inventory and you don’t count the item, it remains, “Uncounted”. There is a process for setting all those items back to zero if you don’t have them, as in they were never counted.
If you are counting in one batch, then answer this question with answer 2) Set Quantity On Hand to Zero for ALL Uncounted Items.
If you are counting in batches, then answer this question with answer 1) Keep Your Current Quantity On Hand for Uncounted Items . This is true even if this is your last batch and your whole store is counted. There is a separate process for Zeroing out these items.
You will get prompted to confirm again.
Zeroing Out Items Without Recent Counts
Lets say that you are doing your physical inventory over 2 weekends. You should enter you counts and then accept them, but don’t zero out. The next weekend you repeat the process. So now it is Monday and you are looking your inventory totals and you see inventory for things you don’t have. To zero them out select the option to Ctrl-Z – Zero Uncounted.
In this scenario you would enter in the date that you first started counting or a day or two before. Then any items that were not counted during either batch will get set to zero.
MAKE A BACKUP! – You should make and preserve a backup copy of your data. Inventory counts are expensive and time consuming. We want to help you protect your investment by making sure you have a backup. In addition, although you can back-date many reports, it is often helpful to have the ability to go back in time exactly.
You should print (and keep) a copy of the Inventory Summary Report.
You should also run the Inventory Adjustment Detail report after you have accepted your counts to get the official totals of your adjustments. If you are going to open your store the same day you accept your counts, then run this report before you open so you don’t have a mix of normal transactions in with counting adjustments.
Save copies of these reports for your accountant.
Congratulations! You are all done.