Hi there and happy New Year!

I have been with Sage since 1997 and Sage 500 ERP since 2000 and I would like to share some of my knowledge and the experience in distribution modules that will help you understand Sage 500 ERP better. Typically the end of the year or the beginning of the new year is the time when most distributors conduct a physical inventory count hence my first blog is on that subject. Beside the fact that GAAP and IRS rules require you to either count your complete inventory on an annual basis or implement a perpetual counting system the primary purpose is to verify that the quantities on hand of your inventory in your ERP reflects what is actually on the floor or shelf. And this is because the stock accuracy is vital for good customer service and effective replenishment.

So here are a few notes on preparing for your year-end physical count:

1. Decide on the most appropriate method for your company: count cards, count sheets, or barcode scanners. If you decide to use count cards or count sheets and prefer to reformat them you can do so using Crystal Reports. Count cards file is IMZRA001.RPT and count sheets file is IMZRA002.RPT
2. Make sure your staff members are familiar with the process. If you are unable to conduct a short training start counting with something smaller with less movement to learn how your software and hardware package works.
3. Perhaps the most important parts of the planning process are to organize your warehouse before you begin the physical count.
4. And absolutely do not forget the backup your data at least 3 times: when you freeze but before you begin counting your inventory, again after all your counts have been entered but not posted, and a third time once the physical inventory batch has been posted.
5. It is recommended to split your counts in multiple batches so that one or more items erroring out are not holding up entire physical count.
6. If an error cannot be resolved within the allocated time do not enter the count for that item but rather delete the count number for that item and contact your Sage 500 consultant or directly Sage 500 technical support. This way you can isolate the item and troubleshoot it separately while the physical count for the rest of the inventory is getting completed.
7. Carefully review the reconciliation report before accepting counts that differ from the frozen on-hand quantity.

Here is an example on how to interpret the data from the Physical Inventory Reconciliation Report. For any item that is counted before the date and time of the transaction listed in the report under Update Date column that counted quantity should stay the same as entered. For any transaction that was counted after the date and time of the transaction the counted quantity should be adjusted for the transaction quantity. For example: an item has frozen quantity=87, and counted quantity=81. After the count has been entered a shipment was committed and it will show in reconciliation report before the posting of the physical inventory batch. In this case no adjustment is needed for the entered count quantity. After the physical inventory batch is posted the quantity on hand should show as counted quantity – shipment quantity, or 81-2=79. However if the sequence was freeze, ship, count then the counted quantity should be adjusted for the shipment quantity. In this case entered counted quantity should be report counted quantity + shipment quantity, or 83=81+2. Since the frozen quantity=87 in this case an adjustment will be 87 – 83=4.

Remember that Data Porter is fully supported with Process Physical Inventory task. That means that you can export the Enter Counts grid information to Excel for reporting purposes, to use as a replacement for count sheets and to copy data to Data Porter for importing counts.

Export of the grid to Excel:

Data in Data Porter ready to be imported into a physical count batch:

If you would like to discuss this subject further please post your message and I will look for the best answer as soon as possible.

Zenon