Stop shutting down for annual physical inventory counts. Cycle counting lets you maintain accurate inventory counts throughout the year by counting small portions on a regular schedule—without disrupting operations.
Last updated: 2026-01-03
A continuous approach to inventory auditing that replaces disruptive annual counts.
Why successful businesses prefer cycle counting over annual physical counts.
Count during normal hours without stopping operations. No overtime, no lost sales, no disruption to customers.
Discover discrepancies when they happen, not months later. Identify root causes while details are fresh.
Track accuracy trends over time. See which products, locations, or processes cause the most discrepancies.
Counting a few items daily is easier than counting everything at once. Staff can fit it into their routine.
Count high-value items more frequently. Spend less time on items that rarely cause issues.
Demonstrate inventory control to auditors with documented, regular counts. Meet compliance requirements easily.
Not all items need the same counting frequency. Use the 80/20 rule to focus effort.
Top 20% by value (~80% of total value)
Your most valuable items. A 1% error here costs more than 10% error on C-items. Count often.
Next 30% by value (~15% of total value)
Important but not critical. Balance counting effort with value at risk.
Bottom 50% by value (~5% of total value)
Low-cost items where errors matter less. Still count periodically to maintain overall accuracy.
Choose a method that fits your operations. Many businesses combine approaches.
Count items based on their ABC classification. A-items get counted most frequently, C-items least. This is the most common approach.
Count all items in a specific location (aisle, shelf, zone) before moving to the next. Efficient for large warehouses where counters can work systematically.
Select items randomly for counting. Helps detect patterns of theft or fraud because it is unpredictable. Good for compliance and audit purposes.
Count items when they reach zero or when you interact with them (picking, receiving). Takes advantage of natural touchpoints without scheduling separate counts.
Start small and build the habit. A consistent routine beats an ambitious plan you cannot maintain.
Sort items by annual value (units sold × cost). Top 20% = A, next 30% = B, bottom 50% = C. This determines counting priority.
Decide how often to count each class. Example: A-items monthly (12×/year), B-items quarterly (4×/year), C-items annually (1×/year).
Break it down daily or weekly. If you have 100 A-items to count monthly, that is about 5 items per workday. Assign specific times (e.g., first 30 minutes of day).
Designate who does the counting. Rotating responsibility helps catch issues different eyes might see. Make it part of someone's job, not an afterthought.
Record counts and variances. When discrepancies occur, investigate the cause—do not just adjust the number. Look for patterns (certain products, locations, or shifts).
Measure inventory accuracy rate over time. Target 95%+ for most businesses, 99%+ for high-performing operations. Use trends to focus improvement efforts.
Count when items are not moving—start of day, after receiving is complete, or end of day. Avoid counting while orders are being picked.
Do not show counters the expected quantity. Let them count first, then compare. This prevents bias and catches real discrepancies.
If variance exceeds threshold (e.g., 5%), have a second person recount before adjusting. This catches counting errors vs. actual discrepancies.
Scan items to ensure you are counting the right product. Eliminates look-alike mistakes and speeds up data entry.
Items may be in multiple locations (main shelf, overflow, damaged goods). Count all locations where the item exists.
Every discrepancy has a cause. Receiving error? Picking mistake? Damage not recorded? Fix the process, not just the number.
StockZip makes cycle counting simple with mobile scanning, variance tracking, and adjustment history. Know your accuracy rate and identify problem areas.
Common questions about scanning, offline mode, pricing, and migration.
Cycle counting is an inventory auditing method where you count a small subset of inventory on a regular schedule, rather than shutting down to count everything at once. Over time, all inventory gets counted, but operations continue uninterrupted.