A Practical Guide
to More Efficient Cycle Counting

When you deal with inventory every day, a proper cycle count program is a must. 

Cycle counting is a standardized process that allows distributors to count a small subset of their inventory several times per year. When done well, these structured audits play an essential role in accurately tracking and managing your inventory. 

Ready to improve your inventory management operations? In this guide, we’ll break down the advantages of effective cycle counting and how you can make your process more efficient and effective.

The Benefits of Cycle Counting

Regular inventory checks are a standard part of maintaining accurate item counts, and cycle counting helps streamline and improve this process. 

The main advantage of this process is that you can count a small subset of your inventory several times per year. This method gives businesses more flexibility than a traditional physical count where you perform one massive count of all items once per year. These structured, recurring audits provide a variety of benefits:

• Improved inventory accuracy due to more frequent checks and up-to-date records.
• Less disruption by performing counts on smaller batches throughout the year while allowing operations to continue without interruption.
• Improved purchasing by providing more correct stock levels that limit overstocking and understocking.
• Better order fulfillment due to more available products and improved inventory accuracy.
• Higher customer satisfaction by preventing stockouts and improving overall inventory accuracy that allows businesses to fulfill orders more quickly and reliably.
• More immediate feedback that your warehouse procedures are being followed and that your inventory practices are effective.

8 Problems That Cycle Counting Can Expose

In addition to making inventory management more efficient, cycle counting also serves as an effective tool for identifying existing inventory problems. Jon Schreibfeder of Effective Inventory Management breaks down some of the major issues that cycle counts can reveal:

• Incorrect quantities used to fill orders
• Wrong products used to fill orders
• Products filled from the wrong stocking location
• Stock put away in the wrong bin
• Incorrect units of measure for counts
• Data entry errors
• Damages materials mixed with good stock
• Stock missing after not being properly recorded

Best Practices for Setting Up an Efficient Cycle Counting Program

Cycle counting is an extremely useful process, but it’s only effective when implemented and followed correctly. It takes a consistent, disciplined program to provide more streamlined, effective item counts than what physical annual counts offer. 

That continual process can take some work to set up appropriately, but it can pay major dividends. Cycle counting also doesn’t need to be an overly complicated process to yield the results you want. Jon Schreibfeder recommends taking the following steps to set up a practical, more effective cycle counting program:

1. Define goals with specific targets for accuracy.
2. Evaluate your current items and classify inventory based on cost or movement of goods.
3. Build a schedule around the total numbers of items and how many times they should be counted each year, with a target daily number for counting.
4. Clearly break down who oversees performing counts, auditing results, and approving any adjustments, as well as the codes used to justify adjustments.
5. Lock daily procedures, with a system in place to record movement during counts.
6. Adjust shelf counts before judging variance to reconcile floating paperwork. 
7. Track accuracy, hold monthly reviews, and monitor repeat offenders to fic potential issues and verify accuracy.
8. Implement technology like barcode scanners and cycle counting automation through a Warehouse Management System (WMS) when you’re ready to enhance your cycle counting process.

How to Use TrulinX to Simplify Cycle Counting

Cycle counting with TrulinX is designed to be fast, simple, and highly efficient. Using our handheld wireless devices and TrulinX Air Module, counting approximately 20 items per day takes only a few minutes and can be seamlessly integrated into daily warehouse routines with minimal disruption.

Despite the small-time investment, the return on that effort is significant. Accurate, consistent cycle counting dramatically improves inventory accuracy, warehouse visibility, and operational efficiency, delivering an ROI that is truly off the charts.

TrulinX ERP provides distributors with the tools they need to proactively manage inventory, improve cash flow, maximize inventory returns, and strengthen their bottom line. With real-time data and system-driven best practices, your team gains confidence in inventory levels while reducing surprises, write-offs, and excess stock.

Our proprietary TrulinX Air module further enhances these benefits. As a fully integrated wireless warehouse solution, TrulinX Air streamlines data capture, improves accuracy at the point of activity, and significantly accelerates the cycle counting process, along with receiving, picking, and other warehouse functions. The result is faster execution, cleaner data, and a more controlled, efficient warehouse operation.

Lastly, TrulinX uses a ranking-based system to help users simplify their cycle counting process. The TrulinX Location Master Maintenance screen allows you to:

1. Indicate how many times per year you want to count your items. You can set this up by item class using the A, B, C, and Z class frequency fields using the time periods designated by your company, or utilizing the Best Practice model identified.  
2. Use the Max items to count field to indicate how many items you want to count per cycle count. For example, you may only want to count 200 items at any given time.
3. Use the A-Z class frequency fields to override the values entered. This step is useful if you want to count one specific item or the items in a particular SPC more or less frequently. The item values will override the SPC values, which in turn will override the location values.
4. Run the physical inventory selection process and select the use cycle count check box when you are ready to perform a cycle count. In the As of Date field, enter the date to use for selecting items for the cycle count. 
5. Finish the physical inventory process as usual. The Last Cycle Count field in Item Location Maintenance will be set to the date that the Physical Inventory Update Process was run.

Ready to improve inventory accuracy and streamline your management process? Tribute, Inc. understands the unique challenges of industrial distributors and fabricators, and we work with our customers to create the tools they need to succeed in today’s competitive marketplace.

Request a free demo of TrulinX today to see how our software gives you the tools to improve cycle counting and improve your bottom line.

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