Cycle counting is a great auditing practice to encourage accurate inventory counts and reduce the risk of inventory undersells, oversells, etc. Learn the best practices merchants can utilize with the help of an inventory management system.

1. Inventory Cycle Count Best
Practices

2. What is cycle counting?
● Cycle counting is a way to audit a smaller subset of your inventory in a
specified location on a specified day.
● This happens continuously, dependent upon the amount of inventory you have
in stock. The cycle count process could take anywhere from a week to several
months.
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3. Why is cycle counting important?
The purpose of cycle counting is to account for discrepancies between the
quantities you should have and the quantities that are actually physically present
in your warehouse.
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4. Inventory Cycle Count Best Practices to
Maximize Efficiency
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5. #1: Your facility should schedule cycle counting
to be a part of the normal operations of the
facility.
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6. #2: Schedule cycle counting frequently. The
higher the frequency of cycle counting, the higher
will be the accuracy of inventory and lower will be
the inventory write-offs.
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7. #3: Properly classify items into ABC groups. In
addition, you should review your classification
periodically (monthly/ quarterly).
● Generally accepted rules of thumb are that Group A
should comprise of about top 70% of inventory value,
group B next 15% and Group C the bottom 15% of
inventory value.
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8. #4: The assignment of dedicated cycle count
teams allows the company to train a number of
individuals to perform these tasks.
The size of the team will be dependent on the
size and complexity of a company’s inventory.
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9. #5: Products should be counted at least once
every quarter.
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10. #6: Two separate individuals should count the
products, and a blind comparison of their counts
should be made before adjustments are
recorded.
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11. #7: Before cycle counting is performed, all open
transactions such as receiving, shipping, and
WIP, should be closed out for the items that are
selected for cycle counting.
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12. #8: You can prevent errors by investigating
sources of error. It’s crucial to identify and fix
process or training issues that cause inventory
errors.
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13. #9: You should track inventory accuracy metrics
over time. In addition, you can set targets for
inventory accuracy.
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14. #10: Coordination of items being counted is
critical in cycle counting.
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15. #11: Cycle counting should be done at the start
of the day before the operations of the facility
have begun in full-swing.
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16. #12: Cycle counting process should be well-
defined and documented.
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17. How Cycle Counting Helps Your Business
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18. More cycle counts means less physical counts. Less physical counts means fewer
man hours and less room for human error.
Messy inventory is inaccurate inventory, and inaccurate inventory leads to:
● Oversells
● Undersells
● Stock lying around the warehouse not listed on your online channels
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19. Thank you!
Start your auditing process the right way with SkuVault
inventory management system. Get started today!