How to Perform Inventory Cycle Counting in Dynamics 365 Finance and Operations

How to Perform Inventory Cycle Counting in Dynamics 365 Finance and Operations

Inventory is an essential part of many company’s day-to-day operations and is one of the major drivers of revenue, costs, and future planning decisions. You cannot sell what you don’t have and as such, it is essential to maintain accurate inventory counts. Dynamics 365 Finance and Operations is a robust Enterprise Resource Planning (ERP) system that provides a platform for organizations to effectively manage their business operations. Included in the inventory management capabilities is inventory cycle counting. This blog will outline how to perform cycle counting in Finance and Operations using basic inventory management processes to allow organizations to efficiently keep track of their inventory.

How to Perform Cycle Counting in Finance and Operations

Inventory cycle counting begins with creating a new counting journal. There are multiple storage and tracking dimensions that you can enable for the count such as tracking by batch number or serial number.

Next, lines are created. You can create lines manually or you can use the system to generate lines for you. To do this, click create lines then specify the various parameters the system filters by. These include options such as storage and tracking dimensions, a last counted date, and counting group. Counting groups are assigned to items based on defined business rules for counting. For example, you can set up counting groups to count items periodically such as monthly or annually. Another rule type is to count items when inventory falls below a predetermined level such as zero or another specified quantity.

Once lines are created, the count is ready to begin. There are multiple options for performing the cycle count. A worker can perform by the count on a mobile device by opening Finance and Operations in a web browser and engaging directly with the system. Only one user can access the journal at a time. Finance and Operations is fully integrated with Excel. There is an option to open the count journal in Excel with a live connection that can be published back to Finance and Operations. Using this method, workers can take advantage of all the standard Excel functionality for data entry and data filtering while maintaining a real time connection to the system.

However, using Finance and Operations to perform the inventory count directly requires each worker have a user license. If the employee’s responsibility within Finance and Operations is limited to cycle counting, it may be simpler to print the counting sheets to prevent the added cost of obtaining additional user licenses. Printed counting lists can be distributed to multiple employees then collected for data entry back into the system. When printing the lists, there is the option of specifying if the on-hand quantity should be shown in the lines, or if a blind count is preferred.

Another hybrid option is to export the count sheets to an Excel file that is not connected to Dynamics 365. The count sheets are “printed” but remain in a digital format. The digital file can be emailed to employees and opened on a mobile device with the Office 365 or Excel app. Employees can enter the counts in the file as they walk around the warehouse with the mobile device. The files can then be emailed back to the warehouse manager for upload into Finance and Operations. This method saves paper and printing costs while also eliminating the possibility of lost papers and issues reading the writing.

Once the counts are complete, a warehouse manager transfers the values to the system, where any discrepancies in quantity will be shown. Once the journal is posted, the system will adjust the on-hand quantities as per the counted quantities and post the necessary adjustments to the appropriate account. When posting a count journal, there is also an option to post and transfer the errors to a new journal. That way, the correct lines can be posted and only the lines with errors remain.

Efficiently Keep Track of Your Inventory

As inventory is constantly moving, engaging in regular inventory cycle counts is an organizational necessity. Dynamics 365 Finance and Operations offers a simple and effective process for inventory management that allows businesses to ensure their inventory numbers are always accurate and reliable. If you are interested in Finance and Operations, contact Rand Group today. Our team is comprised of highly skilled technical experts, former practicing CPAs, and experienced management consultants. We have the acumen and expertise to assist companies in using software to improve their business processes and reach new heights.

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