Physical Inventory

POSIM makes it easy to take a physical inventory and automatically update the POSIM database to agree with your physical count.

POSIM also allows the user to take physical inventories of a selected group of items, ignoring the rest of the inventory at that time. Many retail stores have found great efficiency in rotating physical counts through their retail store on a regular basis.
The following pages will take you through the steps necessary to perform a physical inventory with POSIM. To perform a complete physical inventory in POSIM, follow these 5 steps:
  • Pre-plan for your physical.
  • Take a Snapshot of your inventory.
  • Take the actual physical count.
    • Worksheet/import
    • Key entry screen
    • TriCoder
  • Analysis of the results.
    • Variance between POSIM and your count
    • Items that were missed
    • Items not counted in POSIM
  • Update the POSIM database.

Pre-plan for your physical

Pre-planning is the basis for success in taking physical inventory.
  • Review to make sure all item-related transactions have been recorded
    • Review purchase orders for drop shipments, items returned to vendors, partially received orders and unposted receiving logs.
    • Review all working invoices for loaners, consignments, unposted sales, returns from customers, and drop shipments.
    • Items on the dock, in transit, or not on site.
  • Select the counting method: Worksheet, PDA such as the TriCoder, or scanning directly into a computer. Review the use of the method selected to become totally familiar with it.
  • Review the time cycle to ensure the count taken is representative of the units in POSIM. Timing is very important. Review the section of this tech tip dealing with continuing business and reconciling physical inventory.
  • Map out inventory teams and the areas they are to count. Make sure each team knows the areas to count, and that all areas are covered.
  • Before starting, backup your database in the unlikely event that things get out of hand and you want to start over again.
  • The store must be closed for business during the physical count.

Take a Snapshot of your inventory

  • Clear previous physical account.
    • Before you start a physical for the new period you will need to clear the previous period’s count from POSIM. To do this, open Inventory•Analyzer, select the Misc menu and select Physical Inventory. Click the Clear button. This will clear all previous physical counts from POSIM.
  • Take a Snapshot.
    • POSIM’s unique Snapshot feature allows you to analyze your physical inventory against a frozen item database. This allows you to open the store for business after the physical counts have been completed. The Snapshot of your items on hand will be set aside and used by POSIM to allow you to compare your physical count with the snapshot while the actual database items on hand are changing with received items and sales. The snapshot is taken from the physical inventory screen in Inventory•Analyzer. Click the Snapshot button. If you have previously used this feature you will be warned that your previous Snapshot is being replaced. It is important that the Snapshot is taken while your store is closed for the physical inventory count.

Take the actual physical count. 

The store needs to be closed to take an actual physical inventory. Once the physical count of the inventory is complete, the store can open during the analysis of the inventory.
Note: POSIM allows the user to use either the Item ID or the Alternate ID (UPC). When added the to key Entry screen or imported via a spreadsheet, POSIM will convert the Alternate UPC to the Item ID.
Note: If you have committed items from Invoices, Layaways or Receiving Logs, you will need to count those items as being on hand. POSIM will automatically make the necessary adjustments. Remember, you are counting the on hand number, not the available number.
POSIM allows you three ways to record the actual account and upload it into a Physical Inventory file in POSIM. The end result for all three methods is the same — select the method that fits your operations best.
  • Key entry screen. The Key Entry button on the Physical Inventory screen in Inventory Analyzer allows you to enter items directly into the Physical Inventory Count file. This is also a great way to modify counts imported from spreadsheets. The quantity defaults to 1 as you tab or enter after the item is entered. The Tricoder can be set to upload physical counts directly into this screen. If you wish, a barcode reader can be attached to your computer to scan directly into the Item ID field.
  • Worksheet/Import. Use either the On Hand report or Define A Report to create the count sheet. Save the report to file. Open the file; use a spreadsheet to adjust the file so that it can be printed out and used as a worksheet by the teams to count and record physical inventory. Make sure to save the file so that you can use it to record the results of the count also. When the teams return with the count sheets created above, open the saved file and adjust the on-hand quantities to reflect the actual count. When the physical has been completed and the files on the computer have been updated to record the physical count, you will need to adjust their layout the Physical inventory layout.
A B C D
1 *PHYS Item Id Actual Count
2 PHYS 1015 25
3 PHYS 1016 13
4 PHYS 2250 2
    • The asterisk before the “PHYS” in row 1 tells POSIM to ignore this line.
    • Save this file as a text, tab delimited file.
    • Go to the Physical Inventory screen.
    • Click on the Import button.
    • POSIM will ask you to name an Error log file. Should there be any problems with the import, POSIM will put the line of the error and an error code in the Error Log.file.
    • These steps will import the counts into the physical inventory files in POSIM.
    • The number of different items counted will show in the No. Of Records field.
  • Tricoder – As the accuracy of this count is vital to all physical inventory results, the majority of POSIM users have chosen to use a portable hand-held data collection device for taking physical counts. The most popular of these devices is the Worthington TriCoder. The TriCoder, as well as other hand-held devices, has barcode scanner for accurate item entry. The user scans an item, and the TriCoder asks for a quantity. After entering a quantity, the user scans another item. When using a hand-held device such as the TriCoder, the process of counting becomes simple and flawless. Several TriCoders can be used simultaneously, which reduces the time required to complete a physical inventory. Once the count is complete, the physical count data needs to be organized and imported into POSIM. The Tricoder is either formatted to enter directly into the Key Entry window of the POSIM Physical Inventory screen, or it is formatted to upload into a spreadsheet in the format shown in the Worksheet /import discussion above. If you rented the Tricoder from POSIM, it should be already formatted for your use. If your Tricoder was rented or bought, and you don’t know which program it is programmed for, you will need to call Worthington, the manufacturer, or the company you rented or purchased the Tricoder from. The Tricoder instructions will show how to capture data and upload it into a computer.

Analysis of the results and updating the POSIM Database 

When the physical count data is added to POSIM, it is taken into the Physical Inventory file in the POSIM database. It is important to note this is a separate and distinct file from the Items file. In order to do comparison reports, you must look at several desired scenarios. These two files, the Items file and the Physical Inventory file, will have Item IDs in common.
Section I reflects all those Item IDs that are in the Items file in the database, but were not imported with the physical count data into the Physical Inventory file. Section II is all the Item IDs that are in both the Items file and in the Physical Inventory file. Section III contains all Item IDs that were imported into the Physical Inventory file from the physical count data that do not exist in the current Items file in the database.
  • The Actual Count report will show you the items with their quantities, exactly as they were imported. This report will allow you to compare and verify the counts from your original import document(s), with the actual Physical Inventory file in POSIM, before running the remaining reports. All quantities from this report should match the quantities in original import spreadsheet(s). You will notice that when the Actual Count Report is selected, the only option available to you is Report.
    • Note: Corrections to the Physical Inventory File can be made by adjusting the count in Key Entry for any item.
  • The Count/POSIM Variance report will show only the variance of those Item IDs that are in both the Items and the Physical Inventory files. If an Item ID is in the Items file but not in the Physical Inventory file, it will be ignored in this report. The same applies if the Item ID is in the Physical Inventory file but not in the Items file – it will be ignored in this report. Clicking the Update button while the Count/POSIM Variance report is selected will change only those item quantities from the intersection of the Items and Physical Inventory files and will ignore Item IDs from sections I and III.
  • The Unidentified Items report will show only the items that were imported from the physical count data that do not exist in the Items file in the database (items from section III). That is, only those Item IDs in the Physical Inventory file, which are not currently in the Items file, will be shown in the Unidentified Items report. Clicking Update while the Unidentified Items report is selected will add item IDs (create Item cards) for those items that were imported into the Physical Inventory file, but are not in the current Items file.
    • NOTE: When Item cards are created through this Update process, the only information that will exist on them will be Item ID and On Hand. It is recommended that Item cards be created manually, or through UITM import, to ensure that sufficient data is available for item definition. The concept underlying the Unidentified Items report is that if the items are in the Physical Inventory file, you must have counted them. Therefore you want to add them to the database.
  • The Missing Items report will show only those items in the Items file that do not exist in current the Physical Inventory file, physical count data (items from section I). Any item in the Items file that has an on hand value of zero will be excluded from this report. When the Update button is clicked with the Missing Items report selected, the on hand values for all the items in the report will be set to zero.
    • NOTE: A security feature has been built into this report. If the Physical Inventory file is empty, when the Update button is clicked, a prompt will advise that no items exist, and that no on hand values will be set to zero. Take special note that if even as few as one record exists in the Physical Inventory file, and the Update button is clicked with the Missing Items report selected, on hand values for ALL other items in the database will be set to zero.

Spot Inventories 

Along with the concept of Item grouping for physical inventories, you now have the ability to perform a spot inventory any time you deem necessary. By using the Selection menu, and the To and From criteria, you can isolate a small group of items to be inventoried at any given time.
For example, if Joe Retail wanted to do an inventory of all his items for a certain vendor, he could perform a physical count of all items from that vendor and import the information as discussed. Then from the Physical Inventory feature of POSIM, he could set his Selection index menu to Vendor ID, his To and From criteria to that vendor’s ID, and run his reports accordingly.
He would be working with a small group of Item IDs from his Items file, and a small amount of data in his Physical Inventory file. The reports and updates would be fast and efficient.
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