Inventory how-to
How to do a physical inventory count
A physical inventory count means manually counting every unit of stock you hold and comparing it to what your records say you have.
Short answer: A physical inventory count means manually counting every unit of stock you hold and comparing it to what your records say you have. Do it on a set schedule, with a clear process, and fix the records in your store admin right after. SteadyShelf does not run counts for you, but accurate counts make its forecasts and reorder suggestions more reliable.
Why counts matter
Your reorder decisions are only as good as your on-hand numbers. If your system says you have 40 units of a SKU but you actually have 25, you will order late and run out. Regular counts catch shrinkage, damage, picking errors and receiving mistakes before they cause a stockout or an oversized order.
Full count vs cycle counts
A full count means stopping and counting every SKU at once, usually once or twice a year. A cycle count means counting a small group of SKUs on a rotating schedule, for example your top sellers every month and slower movers every quarter. Cycle counts spread the work out and let you catch errors sooner, which matters more for fast-moving variants.
Keep the process clean
Count one location at a time, and do not let stock move in or out while you count it. Use a simple count sheet or spreadsheet with SKU, expected quantity, counted quantity, and a note field for damaged or unsellable units. Have a second person spot-check a sample of the counts, especially on your highest-value or fastest-moving items, since those errors cost the most.
Step by step
- Pick a count method: full count on a fixed date, or cycle counts on a rolling schedule by SKU velocity.
- Freeze receiving and shipping for the items or location being counted, even briefly.
- Print or export a count sheet with SKU, variant, and current recorded quantity.
- Count physically, writing down the actual quantity for each line, including anything damaged or unsellable separately.
- Compare counted quantity to recorded quantity and flag any variance over a threshold you set, like 2 units or 5 percent.
- Investigate large variances before adjusting (check recent orders, returns, and receiving records for errors).
- Update the on-hand quantity in your store admin so forecasting and reorder tools work from accurate numbers.
Worked example
Say you cycle count your 20 best-selling SKUs every month. For SKU "BLU-MUG-12OZ", your records show 60 units on hand. You count the shelf and get 52 units. That is an 8 unit variance, about 13 percent, well above your 5 percent threshold. You check recent orders and find a return was processed but never added back to stock. You add the missing 6 units back, investigate the remaining 2 unit gap as likely breakage, and update on-hand to 52 with a note.
How SteadyShelf helps
SteadyShelf does not run stocktakes or cycle counts, and it has no barcode or scanning tools to help you count. You need to do counts manually or with a separate counting process, then make sure the corrected on-hand numbers are reflected in your store admin, since SteadyShelf pulls on-hand data from there to build its forecasts and reorder suggestions.
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Related guides
- How to do ABC analysis on your products
- How to do cycle counts in a small store
- How to evaluate a new supplier
- How to decide which products to stock and which to dropship
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FAQ
How often should a small store do physical counts?
There is no fixed rule, but many small stores do a full count once or twice a year and cycle count top sellers monthly. Pick a frequency you can actually sustain, since a count schedule that gets skipped is worse than a simpler one you keep.
What should I do with the corrected numbers after a count?
Update on-hand quantities in your store admin as soon as the count is reconciled. Accurate on-hand numbers directly affect reorder point and order quantity calculations, so stale figures can lead to ordering too much or too little.
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