Step 01
Cycle plan generated
ABC analysis drives the schedule. A-class items counted weekly, B-class monthly, C-class quarterly. Custom schedules per warehouse or zone.
Inventory Management | Cycle Counts & Adjustments
Cycle counts that don't freeze the warehouse.
Zone-based, ABC-class-based or item-category-based cycle counts. Only the cycled items lock; the rest of the warehouse stays operational. Adjustments post with reason codes. Full audit trail per Rule 11(g).
How it works
From cycle plan to posted adjustment.
Step 02
Counters scan, system locks only the items
Counters use barcode scanners. The system locks the cycled items for stock-affecting transactions; the rest of the warehouse keeps operating.
Step 03
Variance flagged
Counted vs system stock compared per item. Variance flagged with the reason picker (theft, damage, count error, location move).
Step 04
Adjustment posts
Approved adjustments post to stock and to the variance GL (inventory shortage, inventory surplus). Audit trail captures counter, supervisor, approver, reason.
What the system does
Capability, input, output.
| Capability | Input | Output |
|---|---|---|
| ABC-class analysis | Item value + movement frequency | A, B, C class with cycle frequency |
| Cycle plan generation | Class + zone + schedule | Daily / weekly cycle list |
| Lock-on-cycle | Cycle event start | Cycled items locked; rest stays open |
| Variance flagging | Counted vs system stock | Per-item variance with reason picker |
| Adjustment posting | Approved variance + reason | GL posted; audit trail captured |
-
ABC-class analysis
- Input
- Item value + movement frequency
- Output
- A, B, C class with cycle frequency
-
Cycle plan generation
- Input
- Class + zone + schedule
- Output
- Daily / weekly cycle list
-
Lock-on-cycle
- Input
- Cycle event start
- Output
- Cycled items locked; rest stays open
-
Variance flagging
- Input
- Counted vs system stock
- Output
- Per-item variance with reason picker
-
Adjustment posting
- Input
- Approved variance + reason
- Output
- GL posted; audit trail captured
Compliance + integrations
Cycle counts the auditor accepts.
Cycle counts replace the year-end physical inventory for many Indian businesses. The auditor accepts the cycle-count evidence pack as long as the methodology, frequency, variance handling and audit trail are robust.
Regulations we work within
-
SA 501 (Existence Audit)
Cycle-count evidence aligned with SA 501 inventory audit procedure.
-
AS-2 / Ind-AS 2
Adjustments at FY-end post to inventory shortage/surplus per the standard.
-
Rule 11(g), Companies Act
Audit trail captures counter, supervisor, approver, reason.
Connects to
- Barcode scanner Hand-held scan during count
- Tally Prime Adjustment GL sync
Cycle Counts & Adjustments FAQ
What buyers ask.
Can cycle counts replace the year-end physical inventory?
Yes, where the methodology meets SA 501. Frequency, variance handling and the audit trail are key. Most Indian auditors accept robust cycle-count programmes; some still require a year-end count for high-value items. The system supports both.
What if the count is materially off?
Material variance (configurable threshold) triggers a re-count and supervisor review before any adjustment posts. The investigation captures the root cause (theft, damage, system error, location move). Repeat material variance escalates to the CFO.
How are reason codes used?
Reason codes (theft, damage, count error, location move, expiry write-off) drive both the GL coding (Inventory Shortage vs Inventory Loss) and the management reporting. The CFO sees variance by reason code per warehouse per quarter.
Run a cycle count across one zone, free.
Connect one warehouse. Set up an ABC plan in 5 minutes. Run a count across one zone. Watch the variance flag, the reason capture, the adjustment post, the audit trail close.