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Effective Physical Inventory Count Procedure



Are you the one who responsible for physical inventory count conduct? If yes, this General Physical Inventory Count Procedure may useful for you. This procedure is used to create a structured approach to a physical inventory count.

Physical inventory count is mainly a controller’s responsibility, but in small business, it could be fall into the business owner’s task or an accounting staff. For sure, this would not be done by one person. It would be by a team. Anyway, whoever should, here is a general procedure for effective physical inventory count:



Preparation For The Physical Inventory Count


On the Physical Inventory Count Day




  1. Bagiro

    Oct 24, 2008 at 7:57 am

    Thanks, pak Putra. It’s hard to understand in english. Could you prepare the blog in double language. Indonesia – English.
    But overall this is a good address to learn more about accounting.



  2. Dec 20, 2008 at 6:51 am

    Thank you very much Putra. I will use your method and improvise some of your procedures which best apply to fit to our system. We have more than a thousand items, being a retail hardware, construction and industrial supplier.

  3. Frank R. Murillo

    May 31, 2009 at 5:37 pm

    Your procedures are delightfully comprehensive – I will modify them as needed.

  4. Todd

    Aug 12, 2009 at 1:59 am

    Excellent explanation Putra! One question: How do you count items that come on in rolls, such as a 2000 yard roll of rope, and is cut to length depending on the job. For example, if I need to cut 20 yards to make widget A and 40 yards to make wiget B, I’ve removed 60 yards from the roll, but the roll barely shows any sign of usage. How do you “count” items that are ordered and used based on length without unrolling it all and measuring it?

  5. Apr 30, 2010 at 10:08 am

    I really appreciate the idea of yours in helping in need indivuals in line with accounting profession by posting ideal tips and guidelines on how to conduct more effective ways especially in field of auditing. Indeed, I learn a lot of ideas which may be used in future events. Thanks Putra!

  6. Lance Brandow

    Oct 12, 2010 at 7:25 pm

    Weigh it. Cut off a perfect 3″ piece and weigh it. Weigh an empty spool. Weigh the spool that needs to be counted and subtract the empty spool weight. Divide the spool weight by the weight per inch.
    3″ = 0.21 ounces (then .07 ounces = inch)
    empty spool = 12 ounces
    inventory item = 546 ounces
    Inventory length = 7,628.5714″ (635.7142′)

  7. Mar 25, 2011 at 2:20 pm

    Hi Putra,

    Can you please elaborate more why the physical inventory count is lay on the controller reponsibility for medium to large company?

    On top of that cna you please share more in detail how manufacturing industry handle their scrap process and what is the best scrap control for medium to large company?

    Thank you.

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