A physical inventory count means counting every item in the warehouse and factory at year-end and matching it to book stock. We plan the count, provide trained teams, count by scanning, then deliver an item-wise shortage and excess report with draft adjustment entries that go to the auditor as evidence.
Our team has run the year-end count at a large textile mill: count programme, team allocation, hourly schedule and the final physical inventory report. It has also worked on counts at an automobile company and a food company.
One pattern repeats: shortages and excesses are found in the count but never adjusted in the books, so the same finding returns in next year's audit.
On this page
Planning before the count
- Set the cut-off: stop goods in and out during the count and record the last receipt and issue numbers
- Split warehouses and floors into zones, two people per zone: one counts, one records or scans
- Agree the item list and units (kg, pieces, rolls, cartons) in advance
- Separate rules for WIP: what percentage of completion each stage represents
- Mark obsolete, expired or damaged goods separately
What you get after the count
| Report | Contents |
|---|---|
| Item-wise count sheets | Zone, item, unit, quantity counted, counter, time |
| Variance report | Book quantity, counted quantity, shortage/excess quantity and value, by class (raw materials, packing, spares, WIP, finished goods) |
| Obsolete and damaged stock list | With proposed write-downs |
| Draft adjustment journal | To post after management approval |
| Cash count sheet (optional) | Cash in hand counted the same day |
Want us to do this for you?
Tell us your situation on WhatsApp and we will tell you exactly what is needed and how long it takes.
Scanning, not paper sheets
With paper count sheets, most of the time goes into typing them up and matching them to the books the next day. With our count app each team scans the item barcode or QR on a phone and enters the quantity. Every team's data lands in one place immediately, so large differences show up while counting is still going on and can be recounted.
What we need from you
- Item-wise book stock report at the count date, with quantities and values
- Warehouse and floor layout or a list of zones
- A storekeeper for each warehouse who knows the items
- Approval to stop stock movement on cut-off day
How it works
- Planning meetingFix the date, cut-off, zones, teams and item list. Inform your auditor if they want to observe.
- Team briefingA one-hour briefing the day before: how to count, how to scan, how to mark obsolete stock.
- CountZone by zone, with immediate recounts where differences are large.
- ReconcileMatch to the books using the cut-off; item and class-wise variance.
- ReportFinal report and draft adjustments to management and the auditor.
Frequently asked questions
Can the count be finished in one day?
In most factories, yes, in one day or one night, if planning is done in advance and there are enough teams. Very large warehouses are split into zones over several days, with a separate cut-off for each zone.
Do you provide the count team?
Yes, together with your stores staff who know the items. Our team counts and records; your staff identify the items.
Will the auditor accept this count?
Auditors usually observe the count and test-count samples themselves. Our plan, cut-off records and count sheets make their work easier. We recommend informing the auditor during planning.
Do you do cash counts only?
Yes. Cash in hand counts at year-end or on a surprise basis, using a denomination-wise cash counting form.
Talk to us about your accounting work
The first conversation is free. You get a written price and timeline before any work starts.
Related pages
Inventory count app
Scan-based counting, live variance, recounts and draft adjustments.
Large companiesFixed asset register and physical verification
Register build-up, QR tagging, year-end verification and depreciation schedules.
ServicesAudit preparation and coordination
Trial balance clean-up, reconciliations, confirmations, schedules and every audit document.
Large companiesFinal accounts for multiple group companies
Statements, notes, schedules and deferred tax for every group company in one format.
Written by the EOMS Hisab accounts team. Last reviewed: . Bangladesh rules change with each Finance Act, SRO and circular. Check rates and thresholds against the latest official source before relying on them.