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Physical Inventory with POSIM Diamond

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

POSIM also allows you 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.

Doing a Physical Inventory with POSIM is made easy by following 4 steps:

  • Pre-plan for your physical inventory.
  • Use Batch Processing to freeze the database.
  • Take the actual physical count.
    • Using a worksheet and then importing it into POSIM.
    • Key Entry screen on the POSIM Physical Inventory screen.
    • Using a Tricoder to scan and them uploading it to a worksheet to import into POSIM.
  • Analyzing the results and updating the database.
    • Variance between POSIM On Hand versus what you counted.
    • Missed Items Report – items that POSIM shows on hand for but you did not count.
    • Unidentified Item Report – items you counted that POSIM cannot find an Item card for.

Pre-Plan for your Physical Inventory

Pre-planning for your physical inventory will help you with having a successful physical inventory count.

  • Review to make sure all item related transactions have been recorded in POSIM.
    • Review purchase orders for drop shipments, items returned to vendors, partially received orders, and un-posted Receiving Logs.
    • Review all Working Invoices for loaned items, consignments, unposted sales, returns from customers, and drop shipments.
    • Take into account items on the dock, in transit, or not on site.
      • Select the counting method: Worksheet, PDA like the Tricoder, or scanning directly onto 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 while reconciling physical inventory.
      • Map out the teams and the areas they are to count. Make sure that all areas are covered, and that each team knows which areas to count.
      • Before starting, backup your database. This will make things easier in the unlikely event that things get out of hand and you want to start over again.
      • Plan a time that the store can be closed for business during the physical count to ensure accuracy.

Using Batch Processing to Freeze the POSIM Database

  • Clearing 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 Client >> Misc >> Physical Inventory. Click the Clear button on the Physical Inventory screen. This will clear all previous physical counts from POSIM.
  • Enabling the Batch Processing feature.
    • POSIM’s unique Batch Processing feature allows you to analyze your physical inventory against a frozen database. This unique feature lets you open the store for business after the physical counts have been completed. Batch Processing permits you to post invoices and receive inventory, but the Item card is not updated until you process the batches. Through this process, you can reconcile the physical count against a frozen database until you are ready to update the physical inventory reports, then you can process the batches that have been held in abeyance.
    • To enable batch processing:
      • Go Inventory Client >> File >> Preferences >> Batch Processing
      • Select the Yes radio button.
      • Click OK.
    • You will need to do the same to Sales Client:
      • Go to Sales Client >> File >> Preferences >> Miscellaneous >> Batch Processing.
      • Select the Yes Radio button.
      • Click OK.
    • It is important that the Batch is enabled while your store is closed for the physical inventory count before the count begins. Batch Processing must be enabled on each POSIM computer for both Sales and Inventory.
    • **When the Physical Inventory is complete and all your records have been updated, you will then turn the Batch Processing off in both Inventory Client and Sales Client and then process the batches on only one of the computers. To process the batches, first make sure you have the Batch Processing turned off on both Inventory and Sales Client, then go to Inventory Client >> Misc >> Process Batches. Click on Start. It will begin to process any PO’s and sales that may have happened after you counted your inventory. You will also need to do this in Sales Client. Go to Sales Client >> Misc >> Process Batches.

Take the Actual Physical Count

The Store needs to be closed while you are taking the actual count for the Physical Inventory. Once you have completed counting your store items, the store can open during the analysis of the Physical Inventory reports.

NOTE: POSIM allows you to use either the Item ID or the Alternate ID (UPC ID). When a UPC ID is added to the Key Entry screen or imported into the Physical Inventory screen via spreadsheet, POSIM will convert the Alternate UPC into 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.

  • Using the Key Entry screen to import your Physical Inventory Count
    • The Key Entry button on the Physical Inventory screen in Inventory Client allows you to enter Item IDs or Alternate IDs directly into the “Physical Inventory Count” file.
    • The quantity will need to be filled in the Qty field as you count the items. You can scan each item and enter the quantity as 1, or you can scan one Item ID or Alt ID and then physically count how many you have of that item and enter the number into the Qty field.
    • The Tricoder can be set to upload physical counts directly into this screen.
    • If you wish, you can attach a barcode reader to your computer and scan directly into the Item ID field.
    • You will need to click the “Add To Physical Inventory” button each time you have completed a group of items to add them to the physical count file. It is important to save the count. If you happen to have a power outage before clicking the “Add To Physical Inventory” button, you may not be able to retrieve the data that you have scanned. It is advisable to click the button after each section that you count. When you do this, POSIM will take your count and put it into the File Statistics section “No.of Records:” on the Physical Inventory screen.
  • Using a Worksheet to import your Physical Inventory count
    • Use either the “On Hand” report or “Define a Report” to create a count sheet.
    • Save the report to file.
    • Open the file, and use a spreadsheet to adjust the file so that it can be printed out and used as a worksheet by the teams for counting and recording 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 “OnHand Report” file (Step b1) and adjust the On Hand quantities to reflect the actual count, renaming the spreadsheet as the Actual Count.
      • When you have the spreadsheet filled out with your proper count, save this file as a text tab-delimited file. The file extension needs to be .txt, not .exl.
      • Go to the Physical Inventory screen in Inventory Client. (Misc>> Physical Inventory).
      • Click on the Import button.
      • Name the error file and click Save for the import to begin. (You can place the error file on the desktop for convenience).
      • Your spreadsheet will begin to import the counts into the Physical Inventory files in POSIM.
      • The number of different items counted will show in the “No. of records” field on the Physical Inventory screen. If you had the same Item ID or Alternate ID listed more than once, POSIM will count them as one record and add the quantity together in the Quantity field.
      • When the physical has been completed and the Actual Count spreadsheet on the computer has been updated to record the physical count, you will need to adjust the layout in the Physical Inventory reports.
        • The Layout is:
        • The asterisks before the “Phys” in row 1 tells POSIM to ignore this line – it is for header information to help you.
  • Using a Tricoder to upload your Physical Inventory count into a worksheet
    • As the accuracy of this count is vital to all physical inventory results, the majority of POSIM users have resorted to using a portable hand-held data collection device for taking physical counts. The most popular of these devices is the Worthington Tricoder. The Tricoder and other hand-held devices have a 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 screen 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. Those who formatted the Tricoder will be able to tell you which it is set for. 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 added to 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, we must look at several desired scenarios. These two files, the Items file, and the Physical Inventory file, will have Item IDs in common. The following illustration shows this intersection.

  • Section I reflects all the 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 the 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 the Item cards 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, we must have counted them. Therefore we 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 the current Physical Inventory file, or 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 can set his Selection index menu to Vendor ID, his To and From criteria to that vendor’s ID,then 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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