What is Physical Inventory?
Physical Inventory is the process of manually and systematically counting all items and products present in a warehouse at a given time. The main objective is to verify whether physical stock matches the stock recorded in the management system (accounting or WMS) and to correct any discrepancies.
Types of Physical Inventory
General (Annual) Inventory
Usually performed at the end of the financial year. It often requires a complete operational shutdown and counting of all company SKUs.
Cycle (Rotational) Inventory
A more modern alternative supported by the WMS, where small portions of stock are counted every day without stopping operations.
Importance of Accuracy
For businesses, maintaining accurate physical inventory is crucial for tax and audit purposes. A WMS streamlines this process by enabling the use of radio frequency terminals, eliminating paper lists and manual data entry, which are the biggest sources of error during counting.