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Physical Inventory

Physical inventory is the process of ensuring that the assets a company has listed in its production system match the assets it actually has in inventory. A company takes physical inventory by manually looking at all assets to ensure they exist as recorded, are in the appropriate locations, and consist of the recorded number of units.

A person taking physical inventory can collect physical inventory data in a number of ways, such as by writing down information about the asset manually, or by using a barcode scanner to automatically scan asset information into a file such as an Excel spreadsheet. After this information is collected, any discrepancies need to be reconciled. For example, if a computer is located in Room 549 according to your production data, but is actually in Room 346, you need to either change the record to reflect the true location of the computer, or move it to Room 549.

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