On average, businesses carry about $142,000 more inventory than they actually need to meet demand.
Inventory isn’t just boxes on shelves anymore, and neither is inventory count.
In a world powered by real-time data and automation, counting inventory is less about checking bins and more about syncing systems.
If you’re scaling a fast-moving business, you need a process that’s built for speed, accuracy, and zero guesswork.
A solid inventory count strategy is your edge, it helps prevent overselling, reduces shrinkage, and gives your team clarity across the board.
This guide is your blueprint for getting it right.
Whether you’re using barcode scanners, integrated WMS platforms, or predictive software, we’ll walk you through how to make your inventory count smarter, not harder.
It’s time to ditch outdated methods and build a future-ready approach that works at scale.
What is Inventory Counting?
Inventory counting is the process of physically or digitally verifying the quantity and condition of items a business has in stock.
It ensures that the inventory records in your system match what’s actually on the shelf, in the warehouse, or at any storage location.
Think of it as a reality check for your inventory data.
Instead of guessing how much product you have, or relying solely on automated systems, inventory counting helps you catch discrepancies like missing, damaged, or misplaced items.
Today, inventory counting isn’t just a manual chore. Businesses use a mix of cycle counting, barcode scanners, RFID, and WMS software such as Teamship to streamline the process.
These tools help reduce errors, save time, and provide real-time insights into what’s really in stock.
In short, inventory counting = better data, better decisions, and a smoother operation.
Main Type of Inventory Counts
When it comes to managing inventory, there’s no one-size-fits-all method.
The right approach depends on your business size, stock movement, and accuracy needs.
Here are five common types of inventory count methods, each designed to help you stay in control without overwhelming your team.
1. Perpetual Inventory System
With perpetual inventory system method, inventory levels are updated in real-time through software that tracks every movement, purchases, sales, returns, automatically.
It relies on barcode scanning, RFID, or integrations with a warehouse management system (WMS).
Best for:
Businesses using digital tools and needing real-time visibility.
2. Cycle Counting
Instead of counting everything at once, cycle counting spreads the process over time by counting specific portions of inventory on a rotating schedule, daily, weekly, or monthly.
It’s less disruptive and helps maintain ongoing accuracy.
Best for:
Businesses with a large number of SKUs or fast-moving inventory.
3. Spot Checking
This involves randomly selecting certain items or locations for a quick count to verify inventory records. It’s typically used as a quality control measure to catch issues between full or cycle counts.
Best for:
Verifying high-value items or investigating discrepancies.
4. ABC Inventory Counting
ABC inventory counting is a method that prioritizes stock based on its value and importance, helping businesses focus more on the items that have the biggest financial impact.
It’s based on the Pareto Principle (80/20 rule), where roughly 80% of your revenue often comes from 20% of your inventory. ABC counting helps you manage that 20% more effectively.
5. Physical Counting of Inventory
Physical counting of inventory is a full count of all items, usually done at the end of a period.
While often manual, you can use Teamship WMS to generate reports, prep count sheets, and reconcile faster, making even this traditional method more efficient.
Best Practices for Inventory Counting
A solid inventory counting process isn’t just about accuracy, it’s about building habits that keep your operations running smoothly all year round.
Whether you’re doing a full count or using an inventory cycle count method, sticking to best practices can help you avoid surprises, delays, and lost revenue.
1. Keep Your Inventory Space Structured
A well-organized warehouse sets the foundation for accurate inventory counting. When everything is in its place, your team can move faster and make fewer mistakes.
Here’s what to focus on:
- Store each SKU in its own clearly defined section to speed up counting and reduce confusion.
- Maintain wide, uncluttered aisles so teams can move smoothly between sections during an inventory cycle count.
- Clear out any waste or misplaced stock that could interfere with counting.
- Make sure labels and barcodes are easy to see and scan.
- Use smart storage systems that simplify both picking and counting.
2. Use Smart Tech to Simplify Counting
Modern inventory systems like Teamship are designed to eliminate guesswork and streamline the inventory cycle count process.
Here’s how to get started:
- Automate cycle count schedules so teams know exactly when and what to count.
- Use mobile scanners synced with Teamship for instant updates and fewer manual errors.
- Monitor discrepancies and trends through Teamship’s real-time reports and audit trails.
With the right tools in place, inventory counting becomes faster, more accurate, and far less stressful.
3. Tag Everything with Barcodes or RFID
Barcodes and RFID tags simplify the count process by turning physical checks into quick digital scans, making your inventory cycle count more efficient and reliable.
- Label each item or unit clearly with barcodes that are easy to scan and access.
- Use RFID tags for bulk or high-value items to scan large volumes quickly.
- Link product tags to warehouse locations for streamlined navigation and tracking.
Proper tagging not only speeds up your counts, it also helps prevent stock mismatches and missed units.
Simplify Inventory Counting with Teamship
Teamship isn’t just another warehouse system, it’s designed to make real-life inventory challenges easier to handle.
Here are three features that support smoother inventory counting:
1. Inventory Tagging
Some inventory can’t be captured with a SKU alone. That’s why Teamship includes a tagging feature, allowing you to add text-based identifiers to your items.
It’s a simple way to add context and avoid confusion when managing similar or custom products.
2. Batching / LOT Codes
Whether you’re tracking expiration dates, production runs, or specific deliveries, batching is key.
Teamship helps you assign and track LOT codes across your entire warehouse, making it easier to organize, trace, and report on batch-specific inventory.
3. Kitting
Need to combine multiple SKUs into one product bundle? With Teamship, you can create kits on demand.
It’s ideal for fulfillment workflows and ensures that your inventory counts reflect how items are actually shipped or sold.
Dealing with inventory issues? Reach out to us today!
Final Thoughts
Inventory counting doesn’t have to be a stressful, time-consuming process.
With the right structure, tools, and habits in place, your team can maintain high accuracy while staying focused on day-to-day operations.
Whether you’re just getting started with regular counts or looking to improve an existing system, the key is to stay consistent, organized, and open to using tech that lightens the load.
Frequently Asked Questions
1. How often should I run an inventory cycle count?
It depends on your inventory volume and movement. Some businesses run daily counts for high-value items, while others follow weekly or monthly schedules.
2. What’s the difference between inventory reconciliation and inventory counting?
Inventory counting is the act of verifying quantities physically. Reconciliation is the process of comparing those physical counts to system records and correcting any mismatches.
3. Can inventory counts be outsourced?
Yes, many businesses hire third-party services for year-end physical counts or audits. However, routine counts like cycle counting are usually handled in-house for better control and frequency.