How to Process Your Physical Inventory in Sage BusinessWorks

The physical inventory is a procedure where you physically count your inventory stock and then check the counted quantity against the booked quantity for each of your parts. The booked quantity is what BusinessWorks shows for the on-hand quantity for each of your parts.

When you find differences between the physical count and the booked quantity you need to update the on-hand booked quantities in your software. It is extremely important to follow the Sage BusinessWorks process to accurately update the on-hand quantities of your inventory parts.

A physical inventory can be taken as often as once a month or at the end of your fiscal year.

Steps to process your Physical Inventory in BusinessWorks.

Step 1: Lock your inventory.

• Inventory Control > Transactions > Physical Inventory > Lock/Unlock.

• You will receive a message that this is an exclusive option.

• A message will then appear to confirm locking your physical inventory.

Note: After locking the inventory, do not rebuild or close the month for inventory until the physical inventory process is completed or you will cause discrepancies in your quantities.

Step 2: Print the physical inventory worksheet while the inventory is locked. 

Note: You must PRINT this report directly to a printer.  You cannot PREVIEW or EMAIL this report. This will ensure that the booked quantity is correct for the relative update option.

How to print the worksheet: 

• Inventory Control > Selecting Transaction > Physical Inventory > Worksheet.

• Select Print.

You can now take the printed worksheet to the warehouse to do your physical count of your parts. You need to decide if you should keep your inventory locked or unlocked during the physical inventory process.

While your inventory is locked, you do not have access to any maintenance or transaction options in the inventory module. If users need to get back into the system to post transactions in inventory or order entry modules, the inventory can be unlocked but you will need to use the relative update method.

What is the difference between relative versus absolute update? If you use the absolute method, the number you enter will become the new on-hand quantity, the inventory remains locked. The relative method, the number that you enter, is going to be adjusted based on the transactions entered after the inventory is unlocked.

Step 3: Update the on-hand quantities in your Sage BusinessWorks. 

If your users need to continue doing business, you’ll want to now unlock your physical inventory.

• Inventory Control > Transactions > Physical Inventory > Lock and Unlock.

• Unlock the inventory to be able to process transactions before the physical count can be updated.
• Select Yes.

• Perform the update.
• Inventory Control > Transactions > Physical Inventory > Update.

Note: If you use multiple warehouses, you will need to update each warehouse separately.

• Go to your first warehouse.
• Choose the quantity type to use.
  • Select ‘Relative’ if transactions have been posted between the time inventory was unlocked and the update was posted. The value entered for the update is adjusted based on those transactions. Select ‘Absolute’ if no transactions have been posted after unlocking the inventory.
    • The ‘Relative’ adjusting feature only works the first time you update the quantity.
    • If the update is processed, and you then go back into the update window again to make a correction, the transaction updates using ‘Absolute’ without warning even when ‘Relative’ had been selected.
    • When using ‘Absolute’, the value entered for the update replaces the current ‘on hand’ quantity.
    • If inventory is not locked, the ‘relative’ method cannot be used. Sage BusinessWorks updates using the ‘Absolute’ method, even if ‘Relative’ is selected. Also, if no transactions have been posted, ‘Relative’ and ‘Absolute’ update in the same manner.
    • Do not close the month or rebuild data prior to doing the inventory update. The ‘Relative’ feature does not work if a rebuild or a month end close in Inventory Control has been performed.

• The physical count is the amount that you enter on the update screen.  You will “scroll” through all the items selected via the Setup above.

Note: The unit cost and total cost variance fields also change. That means a posting is going to be done to the General Ledger to adjust the value of their inventory based on this quantity variance.

• A message is going to be displayed asking you to verify if your count is correct before you actually post to the General Ledger.
• Select Yes.

You can go to Maintain Parts and look at a part to view the quantity.

• Inventory Control > Parts > Maintain Parts.

Take a look at your transaction detail report. Inventory control reports transaction detail report.

Note: The Transaction Detail Report is not to be used to reconcile your inventory to your General Ledger, nor to obtain your current on-hand quantity.

• Inventory Control > Reports > Transaction Detail Report.

• View your new part.

Step 4: Print the Variance Report from your Sage BusinessWorks. 

The variance report must be printed after the update and before closing out of BusinessWorks.

This is very important because the system only retains inventory variances from multiple inventory updates until you actually exit out of the software.

• Inventory Control > Transactions > Physical Inventory > Variance.

If you do forget to print the variance report before you exited the BusinessWorks program you can still print the physical inventory adjustments by using the Transaction Register for Adjustments under the Inventory Reports menu.

• Inventory Control > Reports > Transaction Registers > Adjustments.

• Select the specific date range of when you performed your fiscal inventory update.
• Select Preview.

There are four steps to the physical inventory update. First, we lock out inventory. This will prevent users from posting transactions in inventory and your order entry module. Next, you print your worksheet directly to the printer. This will set the book quantity of your parts. Next, we update the quantities from our physical count of the parts. The last step is to print the variance report.

If you have questions or need assistance with your Sage BusinessWorks software at any time, please contact our BusinessWorks support team at 260.423.2414.

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