How to Run Cycle Counts in QuickBooks Desktop Enterprise Advanced Inventory

Before you start

• You need QuickBooks Desktop Enterprise with Advanced Inventory turned on.
• Set up an adjustment account first. Intuit suggests a Cost of Goods Sold account named Inventory Adjustments, created in Company > Chart of Accounts.
• Decide how you'll count: on the QuickBooks Desktop mobile app, on a printed spreadsheet, or on a tablet.
• If you track bins, each item in each bin becomes its own line on the count.
• One cycle count holds up to 5,000 lines. QuickBooks splits it into counts of 200 lines each.

If sites and bins aren't set up yet, start with How to track inventory by site. For the adjustment account, see How to adjust inventory quantity and value.

Step 1: Create the cycle count

1. 1Go to Inventory > Cycle Count.
2. 2Select Create new cycle count.
3. 3Choose the Site, if you track more than one.
4. 4Select Find & Select Items and use Find to pick the items. You can search by custom fields to pull in a group at once.
5. 5Check the items to count, then select Add Selected Items.
6. 6Assign the count to a warehouse person if you want.

An item kept in three bins shows up as three lines. A selection of 400 item and bin lines becomes two counts of 200. Over 5,000 lines, take items off the count until it fits.

Step 2: Count with the mobile app

1. 1On the cycle count dashboard, select Send to device.
2. 2On the scanner or Android phone, open the QuickBooks Desktop mobile app and select your name.
3. 3Select Cycle Count, then choose the counting task.
4. 4Scan each item, or tap its name and type the quantity counted.
5. 5Select Finish to send the counts back to QuickBooks.
6. 6Refresh the dashboard if the counts don't show yet.

Setting up the app and linking a device is covered in How to set up and use barcode scanning.

Or count on paper or a spreadsheet

1. 1On the dashboard, select Send to Excel.
2. 2Print the sheet, or open it on a tablet.
3. 3Count each item at each bin and record the total.
4. 4If you counted on paper, type the counts into the spreadsheet.
5. 5On the dashboard, select Import from Excel and follow the prompts.
6. 6Or skip the import: type the counts straight into the dashboard and select Save.

What the cycle count statuses mean

Step 3: Post the differences

1. 1On the dashboard, select Batch Actions, then Adjust Quantity/Value on Hand.
2. 2Read the message and select OK.
3. 3Review the adjustment window. QuickBooks fills in every difference the count found.
4. 4Check the adjustment date and adjustment account before you save.
5. 5Select Save & Close to accept the changes.

Saving the adjustment changes your stock, but it doesn't update the dashboard. Close the count yourself once nothing else needs to change.

Step 4: Close the count and check the result

1. 1On the dashboard, select the cycle count lines to close.
2. 2Select Batch Actions, then Mark as Closed. You can't edit a closed count.
3. 3Go to Reports > Inventory and run Inventory Stock Status by Item to check quantities.
4. 4Run Inventory Valuation Summary to check the value.

Counts drop off the dashboard 30 days after their last update.

Edge cases

• No Advanced Inventory: Cycle Count is an Advanced Inventory feature. Count the stock, then key each count into Adjust Quantity/Value on Hand with Quantity as the Adjustment Type.
• In Enterprise, Reports > Inventory also has a Physical Inventory Worksheet. You can add an item category column to it with Customize Report.
• Counts on the dashboard don't change stock until you post the adjustment.
• Intuit suggests a Cost of Goods Sold account for inventory adjustments. Ask your accountant to review the count differences you post.
• The Batch Actions menu also has Export to Excel, if you need another copy of the sheet.

If quantities match after the count but the value still looks wrong, see how to fix an inventory valuation mismatch.

Where QuickBooks Desktop leaves the work to you

• Deciding what to count and how often is up to you.
• Someone has to walk to every bin and count every line.
• Paper counts have to be typed back in before QuickBooks can compare them.
• The adjustment records the difference, not the reason for it.
• Each count has to be closed by hand once it's done.