Intro To Inventory Counts

0:02

All right, welcome everybody to physical inventory counting in system five.

0:07

Now this is an intro event, so it's gonna be pretty high level.

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We're just trying to make sure that everybody has the information that they need to make a decision for the broader workshop that we have in two weeks.

0:20

Your presenter today is Charlene, so let's have her get going.

0:24

We got a lot to cover.

0:26

Awesome, thank you so much, Kyle.

0:28

So hello, everyone.

0:29

I still see that there's people coming in, but I'm so happy that you are joining us today and welcome to this month's intro webinar on physical inventory counting.

0:39

I appreciate your time.

0:40

My name is Charlene, as Kyle said, and I'm part of the Windward Professional Services team.

0:45

We really focus on helping customers like you get the most out of system five.

0:49

And if you've attended any of these webinars this year, you would have seen me before.

0:55

Once again, today's topic is physical inventory count in system five.

0:59

It really does follow well with last month's topic on system integrity.

1:05

And really that is kind of the mandate for this year is really trying to provide a consecutive type program that allows you to focus on really relying on the data in your system.

1:19

There are some things that we go through with system five aside from just the regular point of sale and the regular purchasing.

1:25

and it helps us with being able to rely on the data because we want to rely on the data for decision-making.

1:32

And so last month's topic was integrity.

1:36

We're going to touch a little bit on stock integrity today because it's a bit part of the physical inventory count topic but it is really going to follow up with the workshop as it's very related.

1:48

So the structure today is for the next 30 minutes, we're going to walk through the core concepts of physical inventory count so you understand what the tool does and why an accurate count matters and then if you're interested and you want to go further there is the optional hands-on workshop in two weeks time where we're going to actually walk through everything in the product.

2:11

Now I am going to take away or sorry I'm going to present today a little bit of the product just to talk more about the tool itself.

2:19

We'll highlight a few key things, talk a little bit about stock integrity.

2:23

And then what I want you to walk away with today is a shared understanding of how physical inventory counting works in system five.

2:33

You know, if you're an owner, a manager, a person on the floor that's actually running the count, this is for you. So let's proceed.

2:45

Okay, so what we're going to cover today is it again, I keep talking about the webinar versus the hands on workshop, because I don't want to be misunderstanding or disappointed about what today's webinar is about.

2:58

We're going to talk about the concepts, why inventory accuracy matters, the tool itself, the different types of counts that you can do, and the methods that you can use, and the count lifecycle from start to finish.

3:13

And then part two is where we're actually going to delve into the product and go through practical application of using the full workflow of physical inventory count.

3:25

We get a closer look at how it gets started, batches, scanning, the variance.

3:32

So when you're making changes to your inventory, plus the sometimes missed GL adjustment that needs to happen at the end of a physical inventory count.

3:43

Now, if you don't have prior experience with this tool, that's okay.

3:48

If this is brand new to you, great.

3:50

Don't worry about it.

3:51

Today is concept first.

3:53

And that's where we really wanna start before we just jump into the product.

3:59

Yeah, and everything gets broken down into a practical demo that we're gonna do in the live workshop in two weeks.

4:10

Okay, so why does inventory accuracy matter?

4:14

And I know that sounds like a silly question.

4:16

Of course we want inventory accuracy to matter.

4:19

I've been into the hardware store where I live and their system shows one thing and there's nothing on the shelf so you know like I think we all know why it's important but you know counting the inventory stock isn't just busy work or like once a year it and because the accountant tells us to do it right it's accurate inventory is what every other number in the business leans on so when the counts that we have aren't accurate at the business for other reporting, in particular, the inventory value, and it can't even cost you money.

4:59

So, you know, that's kind of what we're talking about now is like, okay, well, what things can it prevent if I'm doing this on a regular basis?

5:06

And I'm not suggesting that you aren't, perhaps you are, but I think going through the process and what we consider to be best practices is an important topic for us to cover as we start to near in we're kind of past the mid-year point and typically people are doing that physical inventory count closer to the end of the year so you've got those final numbers in.

5:29

So okay back to why it matters. Lost sales.

5:34

When your system shows stock like my example of the hardware store it was disappointing you know if you have a promise or an allocation to a then you either have to have that awkward conversation about okay well what do we do now we could order it in for you or the customer chooses to go somewhere else and go to a different hardware store in my example.

5:59

You know it's a totally different story if you don't have the stock and you're aware of it then you're having that conversation with the customer about ordering the stock in rather than it should be here but there's nothing on the shelf.

6:15

On the flip side there's like wasted cash if you're reordering items because the system thinks you don't have them but you actually do.

6:23

And then you're tying up money in product that's sitting on the shelf when you already have existing products.

6:29

And maybe you didn't need to spend the money.

6:31

And ultimately it's really just wrong numbers.

6:35

Even if it's not impacting sales, inaccurate counts can just distort the inventory asset value.

6:41

And we're gonna talk a bit about that in this month around physical inventory count and next month around reconciliations, in that we really want to make sure that our inventory counts are accurate.

6:55

That provides us with the decision-making that we want around what our inventory value actually is.

7:06

So again, I'm just gonna comment once more on, it really ties back to our last month session on integrity.

7:11

We want the data to be accurate.

7:14

And really the bottom line is, Fiscal inventory count keeps system five's numbers true.

7:20

Every purchasing, pricing, any reporting that you do, making decisions around that, we really want the data to be valid.

7:28

And that really is the idea around this entire year's worth of workshops that we're putting on.

7:35

So we do want the balance sheet to reflect what's true.

7:39

And I'm so aware of the time that it takes to do the process of physical inventory count.

7:44

I've been on site with customers late nights and staff working overtime and pizza boxes just to get through all the counting.

7:54

I think it's a big business impact, but it really is important.

7:59

So the question isn't whether to count, it's how to count without the pain of counting.

8:05

And that's what I'd like us to be able to talk about today and in the workshop.

8:15

Okay, so what is a physical inventory count?

8:18

well it's simply comparing what the system thinks you have to what you actually have and I think that's pretty clear and then making any corrections to bring your quantities back in line and of course recognizing the variance.

8:31

Now the variance can come from a variety of different places but that's not what we're talking about today.

8:38

We're talking about how to make sure that the inventory is accurate.

8:43

It can come from something that's broken that didn't get accounted for in the software.

8:49

Like there's all kinds of things that can cause a discrepancy.

8:53

But what we're talking about today is keeping it aligned.

8:57

So where does it live?

8:58

It lives in the inventory and purchases section under physical inventory count.

9:05

Perhaps many of you have used it.

9:08

If your menu still shows fast stock entry, I know that probably is dating things and I'm sure you're on a more current version, but don't worry.

9:16

It really should open the same tool, but if you see that, you should be getting updated.

9:23

And just real quick, the security.

9:27

To do this, there is a security against your user that needs to be change inventory quantities.

9:35

So that user setting allows you to be able to change quantities and process an inventory count batch.

9:42

So we've seen it happen, so I just wanted to bring that up.

9:46

Okay, so the four tabs that are in the physical inventory count tool that we're going to talk about today are the count batch, the count entry, the scan batch, and the variance report.

10:05

Okay, so the way that you count and what you're going to count is really brought into three groups, and that is we're going to make it real simple.

10:16

that the oops all right did I move that yes I did I'm sorry okay so what you count the three that we're going to talk about are the uninitialized now an uninitialized and I'm going to show this in the product real quick but when you're using an uninitialized this is really a blank slate and really marries well with if you're scanning.

10:46

Think about like a blank spreadsheet and you're gonna scan your product and it's gonna load the product into the spreadsheet with the part number and the quantity.

10:56

We also have a periodic.

10:59

And now the periodic is kind of the most, it's more common in my opinion, but that's because people aren't typically fully barcoded.

11:08

Now, the periodic stock count, that's not a blank slate.

11:13

That is a listing of all of the products that you have.

11:17

You print that out and then people walk around and you're writing the quantities against each item.

11:23

And then that gets re-keyed in to the same tool, physical inventory count, and then you process it.

11:31

And then the very last one is the cyclic.

11:33

Now, the cyclic inventory count really ties well with our advanced inventory control module, but that is where you're actually doing it not once a year, but you're doing it periodically.

11:47

Well, now I say the word periodic, but the cyclic is really, instead of counting everything at once, you're gonna break it down into bite-sized pieces.

11:56

And then how you can do that is just take a slice of your inventory and do it on a rolling schedule.

12:02

schedule.

12:03

If you don't have the advanced inventory control module you can do this as well because what you can do in the physical inventory count tool is you get to take parts of your inventory.

12:14

Perhaps it's based on a brand or it's based on a group of categories and you could choose to do those on a quarterly basis and then you're just focusing in on that smaller group of inventory as opposed to the Okay, so now how you capture it, and it really ties into what I was just saying, but the printout method, that's what I was saying with the periodic count is that you print the sheets, count everything on paper, and then you key it back in.

12:48

It says simple and dependable, but it can take a lot of time.

12:51

A previous workshop that we had this year was on the scanning capabilities and barcoding your business.

12:58

And that really is where the efficiency value comes in.

13:02

When we're talking about the big count, you can use laptops with scanners.

13:06

And in the workshop, we're actually gonna spotlight our sidekick mobile application that allows for that.

13:14

That would be a handheld data collector.

13:16

And it really does shine on higher volumes is when you've got like a whole bunch of product that you need to scan and allows you to just scan, scan, scan and then load that into system five super easily with our sidekick app.

13:31

And that really is far more efficient than the printout methods, but it does require the barcoding to be in place.

13:39

So you've got barcodes on your product and barcodes in system five, but really great for the big count method.

13:45

And the external, certainly I've worked with a couple of customers who have done external where they actually bring in their own data collectors, again barcode scanning, and they provide all the scanning, but then provide you with the data and then you import it into system five.

14:01

There is a comment about the mix and match and that is a strategy.

14:07

If you've got some barcodes and some not, but we do wanna be cautious about overriding anything.

14:14

So probably if you're partially barcoded, a consult would be helpful to be on the right path for being able to do this effectively.

14:27

Okay, so here is really the life cycle of a count as we see it.

14:33

And this would be our recommended best practice. So the journey really is these nine steps.

14:39

And if we talk about the first three, that's really your planning phase where you're going to pick your count type and method, What makes sense?

14:48

And I'm hoping that what you're going to get out today and perhaps the workshop is educating you on what makes sense for your business to be able to do or choose the right count type.

15:01

So that's where we're going to choose, sorry, choose the count method and then we're going to clean first.

15:07

And I'm going to show you the stock integrity because that's something that you'll see it highlighted in orange, but that is the recommendation is do that first.

15:16

If there's any integrity issues with your stock, let's get them fixed before we start adjusting any quantities at all.

15:25

And then we're gonna create the batch.

15:27

Now, when we talk about a batch, a batch with physical inventory count, think about it like a big umbrella that is embracing your entire physical inventory count.

15:39

The reason I say that is because you have this batch and in particular, if you're scanning, Let's say you've got four people that are going to go out into your business and scan all your product.

15:51

Each one of them can be working independently on a scan batch and we attach those to a count batch and it all merges together, combines any quantities, so if person A and person B scan the same product in a different part of your business, it's still going to come out to two.

16:12

So the count batch gets created.

16:15

So that's the foundation.

16:17

Then we move into the next step where you're actually doing the count.

16:21

And that is to capture.

16:23

Either you're doing the print and count, write it down on the piece of paper, or you're scanning into those scan batches that I just described.

16:32

Once you do that, you're gonna apply those scan batches to the count batch.

16:37

And just so you know, in the workshop, we're gonna go through each one of these steps so that there is a clear path, but that really is the process.

16:44

You plan, you do the counting, and then the last phase, seven through nine, is really where you're verifying.

16:53

You're confirming the counts, you're looking at the updated quantities because it's going to show you the variance report.

17:01

Look for anything that jumps out, like is there something that just seems not right?

17:06

And that can be a bit daunting if you've got a lot of inventory, but really it comes down to what is this going to impact and then you process once you process that updates the quantities in system five but that very last step also highlighted in orange is we need to post that adjusting entry to your 1200 balance sheet account for the change that we've made that's back to what i originally talked about in matching those two things the the in stock quantity value and what's on your ledger.

17:44

Okay, so the reason the two things were highlighted in orange is that these are common things that can be missed.

17:51

The clean first, run the inventory stock value, or stock integrity, I'm sorry, and then also make sure that that GL is posted.

18:03

Okay, and that becomes the two cautions.

18:06

Sorry, it's a bit of a duplication, but we want to clean before you count.

18:09

And we also want to process our updated quantities because that doesn't get posted to your general ledger and that really becomes an inventory adjustment where we're adjusting the 1200 account on your balance sheet based on how or the value that we've adjusted in your inventory in stock quantities.

18:30

Okay, so before we talk a bit more about the workshop, I just wanna jump into the system five product for a moment and I wanna talk about stock integrity.

18:42

Now, when we did the last weeks, or sorry, last month's workshop, we talked about integrity.

18:49

We talked about ledger integrity and stock integrity.

18:53

And the stock integrity is a little bit tricky to be able to demonstrate because it can take time to process.

19:01

But really the intent behind the stock integrity and why it's so important in the initial stages of doing your physical inventory count is that it can process changes that, well, any discrepancies that you have.

19:14

So I'm going to bring up, this is demo data, but if any of you have run your stock integrity, the first time that you run it, it looks like this.

19:24

And what it's doing is it's looking at transactional data and it's assessing if there is something that doesn't make sense.

19:33

And it, as an example, on this particular item, it recognized that the stock quantity versus the calculated quantity was different.

19:44

against this item for special orders on work orders.

19:48

And I'm gonna explain the difference between stock quantity and calculated in just a moment.

19:53

But what happens is that the next time that we run this, it's going to give us the option to be able to make the decision on which one is right.

20:04

And this needs to happen, should happen before you do a physical inventory count.

20:10

So I'm just gonna run this a second time.

20:12

So, there is documentation on the process of doing stock integrity, you run it once, let the system identify and fix what it can, and then you run it a second time, and I'm just going to let that run, and then we're going to shift over to the physical inventory count for a moment, and then we'll come back here, apologies that keeps opening.

20:55

Okay, so our physical inventory count, as I talked about earlier, the first thing we start with is the Count Batch tab, and that gives us our big umbrella.

21:10

That gives us our count batch where everything is going to be brought into.

21:15

So when we create this, we then decide that periodic stock count or the uninitialized stock count.

21:24

Recall, the periodic is going to display all the items on the screen.

21:29

We can print it out and fill in those quantities.

21:32

Uninitialized is a blank slate.

21:35

I'm just going to choose the periodic so you can see what that looks like.

21:39

And then we're going to build it.

21:44

That's going to pull in all the inventory.

21:47

It's going to display it on the screen.

21:50

And then we can choose to print this.

21:53

And then once we printed it, this is the keying that happens.

21:57

So a manual person has to come in and key in the updated quantities.

22:04

And that becomes how we adjust the inventory.

22:07

Now, I didn't do any filtering on this particular count entry.

22:12

That can be covered in the workshop.

22:14

There are different options that you may want to do as far as do we want to count items that are on work orders or do we not?

22:23

I'm just gonna delete this and then create a new count batch.

22:33

And then we're going to do uninitialized and build that.

22:38

Now that here's our blank slate.

22:40

So let's say you have laptops and you're fully barcoded in your business and you can walk around and scan product, connecting a laptop through remote desktop services into your server.

22:54

You've got the environment where you can just go scanning or you're actually using our sidekick application and you're going around and scanning and then you can load this in into the same interface where we're just looking at a blank slate and we're gonna load the data into it.

23:12

So those are kind of the two different options that we have for bringing in the new quantities.

23:20

So I'm just gonna close this and see where our stock integrity is at.

23:23

Okay, so now that we've run it a second time, we now have this option down here in the bottom right corner where it says view in stock versus calculated.

23:38

Okay, so it's brought back a couple of items and I wanted to explain the in stock versus calculated.

23:45

So on this particular one, this is in department one.

23:49

If you're not departmentalized, you won't have that column, but we can see that it shows an in-stock of zero, but a calculated of one.

23:57

So for a general understanding, I'm just gonna edit this part, okay?

24:18

And we're just gonna flip over to department one.

24:23

So here you can see we have an in-stock quantity of one, but if we come into the cost and stock levels and look at the stock history, stock history is from the beginning of time of the product, it looks at the math around, okay, what initially happened?

24:42

Look at this way back in 1997, and it does plus and minus based on the activity.

24:48

And you can see here that for some reason, I can't explain why, but it has a total stock of one.

24:55

That's what its cumulative stock is, is stock of one, yet the in-stock is actually zero.

25:02

So, this is where making that decision on what's actually true is what the stock integrity does for you.

25:11

Because now I can choose for this item, I can say in stock is correct and I click on that button.

25:19

And that's going to make the adjustment to show that we actually do have one in stock.

25:23

So you can see that it brought up a couple of items and really the meaning behind this is that it's detected where there's a difference between what it's showing us in stock and what the math behind the accumulation of purchasing, receiving, selling and manual adjustments have added up to.

25:45

And that's where it gives you the opportunity to make that decision before you do the physical inventory count.

25:56

Okay, and we're gonna go into more detail on that in the workshop, but I did want you to see that.

26:00

Okay, and then we're just going to flip back to this.

26:06

And I want to talk a bit about the workshop because we're really excited to be able to go into this really critical topic.

26:12

And it is on July 23rd, 9 a.m. Pacific.

26:16

Really does go through comprehensive learning.

26:19

We're going to go end to end with a full session on processing a physical inventory count, looking at the sidekick mobile application, question and answer.

26:30

And then we do have pretty easy access to purchase the workshop.

26:37

It's pretty low cost.

26:39

I think that that's sort of our mantra this year is really around trying to bring this, the high value topics in a low cost, low time commitment way of doing it.

26:52

So winwordsoftware.com slash workshop is how you can make your purchase.

26:58

and I do hope that some of you found some value in today's content and are looking forward to seeing how we can help you with your inventory counts.

27:08

Kyle, just quickly, we've got a couple of minutes.

27:10

Is there any questions in Q &A?

27:13

Yeah, it looks like we've got a couple that are probably pretty easy for this venue and we only got like three minutes left, but there are two questions.

27:22

One was, does an integrity check require a GL entry or does it do it on its own or what's the process or you don't have to explain the whole process but it seems like a yes or no.

27:33

So an integrity check it I guess that it does make me question so we've got the ledger integrity and we've got stock integrity.

27:40

Stock integrity does not do a GL entry so I think that's what probably what we're talking about so if we're adjusting that quantity like I just showed there is no GL entry that's uh that follows that so that's where it's going to lead you to next month where we're talking about inventory reconciliation where we want to be able to reconcile the inventory between the ledger and what the in stock stock value is the real answer to that is that's up next next next anyway then the other one is um if you were to do um a bunch of batches so you're processing several batches and maybe this is answered in the workshop but do you do one variance report at the end of all those batches or does each batch get its own variance report?

28:35

It's all at the end.

28:36

So the idea behind the batches is you do the multiple scan batches, bring them all in and let the system merge them together.

28:44

That was the example that I shared where two people might scan the same item, they're just in different areas of your business.

28:51

and so we want to be able to capture the two, not one overriding the other.

28:57

So yes, for all the sandboxes in and then process, and then you get your variance.

29:01

If you're doing like one count on one day or spanning over two days or something like that, that would be the method.

29:08

But if you were doing month to month to month, you'd probably want to do their own variance reports, right?

29:14

Correct, yes.

29:15

Yeah, if you were doing monthly, then you'd have like just a monthly variance, yes.

29:19

Got it, okay, perfect.

29:20

and that was the questions that came in and we're just about out of time so okay thanks everybody for coming in we hope you join our workshop yeah we're having a lot of fun with these workshops this year so hope to see you there thanks for all your time thanks everybody okay