How to Do a Physical Stock Count

Count, compare and post the variance.

5 min read Updated Jun 2026 How-To

Purpose

Take a physical count of stock at a location, compare with the system balance, and post a single stock-adjustment voucher for the variance. Doing this monthly (or at least quarterly) catches shrinkage early and keeps trust in the system high.

Before you begin

Decide on freeze-or-rolling count. Freeze: pause transactions for the duration; rolling: count by category over a week and compare at a fixed cut-off.
Count sheets printed (use Stock Reports → Physical Count Sheet).
Two counters per high-value section (one counts, one records) for trustworthy numbers.
Approval policy decided for variance above a threshold.

Steps

Start → Inventory & Stock → Stock Reports → Physical Count Sheet.
Run the sheet for the location and freeze datetime. Print it.
Have the team count and write counted quantities in the right-hand column.
Go to Stock Reports → Physical Stock Variance. Enter the same freeze datetime.
Enter counted quantities in the Counted column — either by typing, or by importing an Excel sheet via Import Count.
Review the Variance column. Investigate large variances before posting.
Click Post Variance. The system creates one stock-adjustment voucher per item with a non-zero variance, posting to the variance ledger you configured.
Print the variance summary and have it counter-signed by the location manager — this is the audit trail.

What success looks like

System stock matches the counted stock for every item at the freeze datetime.
A stock-adjustment voucher exists per variance, viewable in Day Book.
The variance ledger's P&L impact is visible in the next trial balance.
A signed variance summary is on file.

Troubleshooting

Variance is huge for one item.: Usually a unit-of-measure mix-up (pieces vs cartons) or a missed transfer. Investigate before posting — do not post a variance you cannot explain.
"Cannot post — freeze datetime has passed.": Transactions happened after the freeze. Re-run the variance with the new datetime, or reverse those transactions first.
Excel import fails.: Column headers / item codes do not match. Download the template from the same screen and use it as a base.

Tips

Do a freeze count once a year (statutory) and rolling counts monthly for ABC-A items.
Counter-sign the variance summary — without sign-off, the audit trail is incomplete.
Warning. Do not edit posted stock-adjustment vouchers. If wrong, post a reversing voucher.