The Power of Cycle Counting: Elevating Inventory Accuracy One Count at a Time

Author: Paul Reynolds

Title: Product Consultant – Senior Product Expert

Organization: Karmak, Inc.

Maintaining accurate inventory isn’t just about staying organized, it’s about staying profitable. In today’s fast-paced parts and service environments, relying solely on year-end inventory counts or spot corrections often leads to bigger issues: lost sales, backorders, and disorganized stockrooms.

Cycle counting changes that.

Regular cycle counting is an essential inventory management practice that significantly enhances the accuracy of inventory records, allowing your team to stay ahead of inaccuracies and avoid the massive disruptions that come with physical inventory shutdowns. When done consistently, cycle counting leads to:

• More accurate inventory records
• Fewer lost sales
• Reduced customer backorders
• Better warehouse organization
• Higher fill ratios and stronger customer satisfaction

The goal is simple: ensure “quantity available” is accurate for 98 out of every 100 part numbers.

Preparation Is Everything

Cycle counting delivers the best results when your inventory is properly prepared. Before starting:

• Make sure parts in process are up to date and pulled from inventory
• Verify receiving is current and packing slips are posted
• Confirm all parts have a designated bin location, including accurate alternate bins
• Clean up the will-call area and void outdated orders
• Pull and deliver all repair order parts
• Fully process returns, both from customers and to vendors
• Return any restocked parts to inventory and update available quantities

Getting your inventory in order before you count ensures you’re measuring real discrepancies, not temporary anomalies.

How Many Parts Should You Count Each Day?

To maintain accuracy, count every part number four times per year. Use this formula to determine your daily goal:

(Number of Stocking Units × 4) ÷ Number of Available Counting Days

If you stock 5,000 part numbers and count on 240 days each year:

5,000 × 4 ÷ 240 = 84 parts/day

Not every part takes the same amount of time to count. Larger components may require more effort, while small bulk items may go quickly. On slower days, count fewer; on easier days, catch up. What matters is staying on pace.

Cycle Count Timing & Best Practices

Cycle counts should be performed during quiet times when warehouse activity is minimal. The ideal time will vary depending on the flow of your operation, it could be early in the morning, around noon, or later in the day.

Poll results from our webinar show a clear trend:

• 45% of respondents said they count in the morning
• 25% in the afternoon
• 20% around midday
• 10% in the evening

No matter when you choose, the key is minimizing distractions and focusing on accuracy.

Additional best practices include:

• Decide whether to print quantities on count sheets
  A blind count—where quantities aren’t shown—helps reduce bias and improves accuracy. However, displaying current quantities can sometimes prompt more detailed review and help uncover hidden discrepancies.
• Count by bin location
  This keeps the process orderly, ensures full coverage, and helps identify misplaced stock.
• Use the “shelf to sheet” method
  Start at the physical bin and verify what’s there—don’t rely on what’s expected. This approach helps uncover inconsistencies and ensures complete bin validation.

Updating Quantity Available

Once the count is complete, update inventory in your business system the same day. Delays introduce risk and confusion and often result in more corrections down the line.

Before making adjustments, take the time to investigate discrepancies:

• Check transaction history for part movement
• Verify recent inventory adjustments
• Look for force-filled parts that could have caused a negative quantity
• Confirm physical receipt of parts even if the packing slip isn’t posted
• See if parts are committed to open orders but not yet pulled

Understanding the source of the discrepancy is critical. Fix the root cause now to prevent it from repeating later.

And if you miss a day of cycle counting? Don’t stress! Just reschedule the count for another time. The goal is consistency over perfection.

What the Polls Revealed

We also asked webinar attendees:

“Does your organization currently have a daily cycle count program?”

62% said yes, while 38% said no.

This is encouraging. Many operations are already making cycle counting a priority. But for those not yet onboard, there’s a clear opportunity to start improving inventory accuracy one count at a time.

Closing Thoughts

Cycle counting is one of the most effective tools a parts department can use to maintain control, increase confidence in available quantities, and improve operational performance. It creates fewer surprises, better service, and stronger financial alignment across the business. Start small. Stay consistent. And aim for accuracy, not just once a year, but every day.

Need help putting these strategies into action? Contact your Karmak Representative or email ProfessionalServices@Karmak.com.

‍