An inventory count is a process that involves making a physical count of each item found in a particular inventory. Counts are commonly employed with all types of inventory in any type of business setting.
The goal of the inventory count is to ensure that all inventory records are accurate. Should the physical count and the records not agree, procedures that are in keeping with company policies and any laws or regulations that apply must be used to reconcile those differences.
One of the most widely used forms of the inventory count is known as the cycle count. Manufacturing firms such as textile corporations or electronics producers typically have massive inventories of raw materials, finished goods, and parts and supplies that are kept on hand to keep production machinery operational. With each of these inventories, the cycle count approach allows for a portion of the inventory to be physically counted during each month or quarter of the year. This allows the physical inventory to be incrementally reconciled throughout the year, and helps to minimize the reconciliation process when the full annual physical inventory count is conducted.