Glossary
Physical inventory
A physical inventory counts everything at once, usually with the doors closed. Cycle counting counts a little every day. One is an event; the other is a habit, and the habit is what keeps the record honest.
What it is
A physical inventory is a full count: every location, every unit, typically once a year, typically with receiving and shipping paused. Cycle counting spreads the same work across the year: a handful of locations each day, chosen by value, velocity or suspicion, with the building running as usual.
Why it matters
A full count gives one true snapshot and then twelve months of drift. Cycle counting never stops verifying, so a drift is caught within weeks of starting, in one bin, with the last movements still fresh enough to explain it. It also does not close the warehouse.
The important part is not the schedule. It is that every difference found becomes a written adjustment with a reason, so the record shows not only the corrected number but why it needed correcting.
A worked example
A pick face for a lip balm is counted on a Tuesday. The system says 31, the counter finds 29. The count records 29, the variance of 2 gets the reason “damaged, discarded”, and an adjustment movement of minus 2 references that count. Next quarter, anyone reading the product’s history sees the count, the reason and the name, not a mysterious drop.
How DockingWare does it
DockingWare runs counts as cycle counts: a count document lists locations, records what was found, and turns each difference into a variance line that cannot be approved without a reason code or a note. Approval writes the adjustment as a movement that names the count. A wall-to-wall physical inventory is the same document run across every location, so both habits use one record.
Questions
- Do I still need a yearly physical inventory if I cycle count?
- Often the auditor decides. Operationally, a warehouse that cycle counts every location on a schedule and records every variance with a reason has a record that is continuously verified, which is what the yearly count was trying to achieve.
- What is a blind count?
- The counter is not shown the expected quantity. They count what they see, and the system compares. It removes the temptation to confirm the number on the screen instead of the number on the shelf.
- What happens to a variance?
- It becomes an adjustment with a reason and a name, written as a movement that references the count. The balance is never edited directly.