Inventory counting is the process of reviewing and adjusting the inventory levels of a business. Companies must keep track of their inventory to prevent stockouts, overstocking, and discrepancies. Different types of inventory counting methods are available, each with its own advantages and disadvantages.

In this article, we will sharply explore the different kinds of inventory counting and what are their advantages and disadvantages over each other.

I. Periodic Inventory Counting

Periodic inventory counting is the most basic and straightforward method of inventory counting. It involves taking a physical count of all inventory items at the end of a specified period, usually monthly, quarterly, or annually. The count is then compared to the recorded inventory levels to determine if any discrepancies exist. The followings are the pros and cons of periodic inventory counting.

Pros:

Cons:

II. Cycle Counting

Cycle counting is a method of inventory counting that involves counting a small portion of the inventory frequently, typically weekly or monthly. The cycle count is then compared to recorded inventory levels to determine discrepancies. The followings are the pros and cons of cycle counting.

Pros:

Cons:

III. Inventory Variance Verification Analysis and Adjustments

ABC analysis is also a main method of counting inventory items. It can be done by counting items into categories based on their importance. The classification is typically based on the value of the inventory items, with items being the most valuable and items being the least useful. The followings are the pros and cons of an inventory based on Inventory Verification Analysis and Adjustments.

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Cons:

IV. RFID Counting

RFID counting is a method of inventory counting that uses radio frequency identification (RFID) technology to track inventory items. Each inventory item is tagged with an RFID tag, which RFID scanners can read. The followings are the pros and cons of RFID counting.

Pros:

Cons:

Conclusion

Accurate inventory counting is essential for any business to maintain proper inventory levels and prevent stock overages and shortages along with minimizing stock discrepancies. 

The choice of inventory counting method depends on several factors, including the inventory levels, the resources available, and the level of absolute accuracy required. 

Periodic inventory counting is the most basic and straightforward method. In contrast, cycle counting, Inventory Variance Verification Analysis, and Adjustments are perfect to get an assessment of your accuracy level on some of your items while RFID counting solutions are more advanced methods that provide real-time inventory levels and help identify discrepancies instantly.

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