Cycle Count
Definition
Counting a small portion of your inventory on a rotating schedule instead of doing one full physical count, so every item gets checked several times a year without shutting down operations.
Want a deeper explanation?
Cycle counts keep your inventory records accurate year-round, which keeps COGS and the balance sheet honest every month.
High-value and fast-moving SKUs should be counted most often. Watch for: count variances adjusted in the system with no investigation, because the cause, whether receiving errors, theft or unrecorded damages, will keep repeating.
Example
Each week your warehouse counts 50 of your 600 SKUs, prioritizing the highest-value items. A variance of 40 missing units on one SKU is caught in October instead of at year-end.