Inventory Count Sheet
Physical inventory count sheet for periodic or year-end inventory reconciliation.
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ACME CORPORATION INVENTORY COUNT SHEET ═══════════════════════════════════════════════════════════════════════ Location: Portland Warehouse A Count date: May 4, 2026 Count type: Physical full inventory Primary counter: Sam Taylor (Warehouse Lead) Witness / 2nd counter: Casey Brooks (Office Manager) ═══════════════════════════════════════════════════════════════════════ INVENTORY DETAIL SKU Description Unit System Counted Variance ───────────── ────────────────────────────────────────── ───────── ──────── ──────── ──────── SKU-1001 | Widget A — blue, 12 oz | each | 250 | 248 | -2 SKU-1002 | Widget B — red, 12 oz | each | 180 | 180 | 0 SKU-1015 | Spare cog assembly | each | 42 | 41 | -1 SKU-2030 | Premium kit packaging box | each | 600 | 612 | +12 SKU-3041 | Branded carrying case | each | 75 | 70 | -5 SKU-4050 | Carton of 24 widgets bulk pack | carton | 35 | 35 | 0 SKU-5060 | Replacement battery pack | each | 120 | 118 | -2 ═══════════════════════════════════════════════════════════════════════ SUMMARY Total SKUs counted: 7 Total absolute-value variance: 22 units ═══════════════════════════════════════════════════════════════════════ VARIANCE ANALYSIS SKU-2030 (+12 packaging boxes): vendor double-shipped recent order; receipt was correctly recorded but replenishment QC missed the over-shipment. SKU-3041 (-5 carrying cases): suspected damaged/discarded units; check warehouse damage log. Minor variances on widgets within expected ±1% tolerance for cycle counts. ═══════════════════════════════════════════════════════════════════════ CONTROLS APPLIED • Counters were assigned to areas they did not normally manage (segregation of duties). • Each counted item was recorded in writing or in the count system at the time of counting. • Variances above the agreed threshold (e.g. ±5%, or ±$X by value) were re-counted. • Items in transit (received but not yet shelved, shipped but not yet posted) were identified separately. • System adjustments require controller approval and supporting documentation. ═══════════════════════════════════════════════════════════════════════ SIGN-OFFS Primary counter: _______________________________ Date: May 4, 2026 Sam Taylor (Warehouse Lead) Witness / second counter: _______________________________ Date: May 4, 2026 Casey Brooks (Office Manager) Controller approval (for system adjustments): _______________________________ Date: ____________________ Maya Chen, Controller
About this template
A periodic physical inventory count is one of the most important financial-control activities for any business that holds product. The count establishes the actual quantity on hand, which determines (a) the cost of goods sold (COGS) for the period — directly affecting net income on the financial statements — and (b) the inventory asset on the balance sheet. Variances from system records often indicate operational issues: theft, damage, miscounting at receipt, vendor under- or over-shipment, sales not posted, or simple data-entry errors. Best practice combines two count types: an annual full physical (typically year-end or near year-end for tax-period alignment) and ongoing cycle counts (rotating subsets of SKUs counted weekly or monthly throughout the year). Cycle counting catches variances earlier and reduces the disruption of the annual full count. Counter assignment matters: counters should not normally manage the area they count (segregation of duties), and each count should be witnessed or independently re-counted to a sample. Variance thresholds (e.g., ±5% by quantity, or ±$X by extended value) trigger a re-count and root-cause analysis before adjustment. Adjustments to the inventory system after the count must be approved by someone other than the counter (typically a controller or finance manager) — this prevents counters from "fixing" systematic issues by adjusting numbers. Tax-wise, the count supports the cost-of-goods-sold calculation; inadequate physical inventory is a material weakness in audited financials and can support IRS challenges to deducted COGS. Modern small businesses increasingly use bar-code scanners or mobile counting apps that integrate with the ERP/POS — the workflow is the same; the technology reduces human error.
When to use it
- Year-end full inventory for financial close.
- Weekly or monthly cycle counts.
- After significant inventory movement (large receipts, large outbounds).
- Spot-checks before tax filing or audit.
- Pre-shipment outbound verification for large orders.
What to include
- Location and count date.
- Counter and witness identification.
- Each SKU with description, unit, system qty, counted qty, variance.
- Variance analysis for significant items.
- Sign-offs from counter, witness, and controller (for adjustments).