Cycle Counting Definition & How-To

Cycle counting is a strategic inventory management practice that offers significant advantages over traditional annual physical counts. By auditing small subsets of inventory on a regular schedule, you maintain high data integrity without halting warehouse activity.

Table of Contents

• Benefits of Cycle Counting
• How to Create a New Cycle Count 
• How to Monitor Inventory Updates During Cycle Count

Benefits of Cycle Counting

Consistent cycle counting ensures that your physical warehouse stock matches your ShipHero records, creating a more efficient and scalable fulfillment process. Some benefits of regularly cycle counting are shown int he table below and following subsections.

Efficiency and Resource Management

Maintaining a match between physical and systematic inventory prevents common logistics bottlenecks:

• Reduced Emergency Restocking: Avoid the need for urgent restocking caused by having less physical inventory than expected.
• Prevention of Over-Stocking: Avoid wasting space and capital on excess stock caused by having more physical inventory than expected.

Improving Operating Procedures

Cycle counting acts as a diagnostic tool for your warehouse. It helps identify systemic issues before they impact the customer experience:

• Identify recurring inventory mistakes within specific teams or zones.
• Detect damaged inventory before it is allocated to a live order.
• Locate misplaced items that were stored in the incorrect bin or shelf.

How to Create a New Cycle Count

• From the ShipHero Dashboard, navigate to Inventory > Cycle Count.
• Choose the type of Cycle Count you want to create. Your choices are:
  • Locations
  • Items
  • Items flagged for recount

• Next, select your filters for the Cycle Count. The filters will vary depending on the type of Cycle Count you choose.
• For Locations Cycle Counts, filters and fields include:
  • Assigned to
  • Due Date
  • Sort Options
  • Exclusions
• You can choose specific location parameters to further narrow down or expand the scope of the Cycle Count.

• For Items Cycle Counts, filters and fields include:
  • Assigned to
  • Due Date
  • Sort Options
  • Exclusions
• For Items Cycle Counts, instead of specific location parameters, you can choose to select a specific client. This is especially helpful if a client is disputing an inventory count or looking for an audit.

• For Items Flagged for Recount Cycle Counts, filters and fields are more limited. For this type of count, the most important fields are listed under Item Parameters, which allows you to input a specific SKU to be recounted. Or you can choose to recount all the items that have been flagged.

• Once you have selected the necessary filters, click the Create button. ShipHero will create a new Cycle Count for you based on your selected criteria.

Managing your Cycle Counts

You can track all of your Cycle Counts from the dashboard. At a glance, you can see if their status is Pending, In Progress, or Closed. You can also track important details such as the due date, the assigned user, the progress percentage, and any discrepancies.

Note that under the Cycle Count column, the type of cycle is listed beneath the name. Selecting a specific count will display slightly different information based on the cycle type.

For example, if you click on an Item type cycle count, you will see which SKUs are part of this cycle:

You can add items to the cycle and remove items that have not been counted yet. Once an item is assigned to a counter, the item cannot be removed from the cycle.

You can edit details such as the name and due date for the cycle:

You can also choose to end the cycle count at any time.

Click on the End Cycle Count button in the upper right-hand corner of the screen.

NOTE: The inventory total from the Cycle Count will be saved once the count has completed.

What if a cycle count batch does not close?

In some instances, a cycle count will not close. Please view the batch and check to see if some of the locations are locked (The locations will be grayed out):

If so, then check the boxes next to the items of the locations that are locked, and the option to remove the lock will appear at the top of the table:

Other details include:

• Expected quantities
• Counted quantities
• Which user counted the item
• Time tracked

When you click on a Locations type cycle count, you will see which locations are part of this cycle. You will also see all the SKUs in the bin:

NOTE: The Export CSV button allows you to download these details as a CSV file so that you can use the data to make strategic business decisions.

How to Monitor Inventory Updates During Cycle Count

Inventory counts are updated in two locations during a cycle count. 

1. They are logged in the Product's Inventory Log.

2. They are also logged in the Inventory Change Log.