Recommended Procedure for Taking Monthly Inventory over Several Days

Many fast lube center owners have expressed frustration with having to take inventory on the last day of the month. This time element does not provide an easy solution for getting the counts accurate once and for all. One solution is to not wait until the last day of the month. The following steps explain how to take inventory over several days at the end of the month. Each step is defined in detail in other articles. If you prefer to take inventory in one day, see the article Recommended Procedure for Taking Monthly Inventory in One Day.

1. Before you begin the inventory process, decide over how many days you want to take inventory. For our example, we will use three days.
2. Separate your inventory into three groups (one group per day).
3. Three days before the end of the month, print an Inventory Count Worksheet (1-7-4-1) for the categories in your first inventory group. Make sure you specify M in the Period field to indicate this is a monthly count.

4. Count your inventory then enter it for comparison with the system’s inventory. Use the Enter an Inventory Count (1-7-4-2) option. Type M in the Enter the Count Period field to specify this is a monthly count, and type the category for which you want to input the counts in the Enter the Category field.
5. Type the counts accurately from the Inventory Count Worksheets. It is extremely important that you enter accurate counts or your inventory valuation will be incorrect.

Whenever your count does not match the system count, the computer beeps and your cursor does not move to the next field. Double-check the accuracy of your entry. Change the entry, if necessary, or press [Enter] again to indicate that your entry is correct.

6. When you have finished entering your inventory counts, you receive an Inventory Variance Report, which lists the items with a different count than what the system calculated.
7. For each item on the report, check your counts again (did you miss a case in the corner?). If you have made any entry errors, pencil in the new count on the report and adjust the variance on the report accordingly. You can re-enter your count to correct the Inventory Variance Report.
8. You must reconcile the counts on the Inventory Variance Report. You have two options for adjusting your counts: Adjust Inventory on Hand or Automatic Inventory Adjustment.

Use Adjust Inventory On Hand (1-7-4-3) to change each variance individually.

If you feel all adjustments need to be made that show on the variance sheet, select Automatic Inventory Adjustment (1-7-4-6) to change these items automatically. The system assumes everything you entered in your initial counts is correct. If you miskeyed, the incorrect amount will be assumed to be correct. You can re-enter the count to correct a mistake and receive an accurate variance report. The previous values will remain.

9. When all items on the Inventory Variance Report have been adjusted, you need to select Update Inventory (1-7-4-4).
10. Repeat steps 3-9 for the next two days to complete your inventory count for the month.
11. On the last day of the month, print the Inventory Valuation Report (1-7-4-5), and review it. If what is reported is not what you expected, check the Cost column. You may not have the correct costs for each item.
12. If you find problems with the cost, you can adjust the cost in Adjust Current Inventory Cost (1-7-7-2) or in Enter Inventory Activity (1-7-7-6). In Enter Inventory Activity, you must specify the Tran Type as 51 (change cost/price). Type the new cost for the item and save your changes.
13. Select Update Inventory (1-7-4-4).
14. Print the Inventory Valuation Report (1-7-4-5) and review it again. Repeat steps 11-13 if necessary.