Tech Note: Understanding How Physical Count Variances Affect Inventory Costs

Periodic inventory counts are conducted by businesses to ensure that inventory items are accurately accounted for and valued. When there is a variance between the on-hand quantity in AccountMate and the actual quantity during your physical count, it may be necessary to adjust the inventory item’s on-hand quantity and total cost. In AccountMate, the total cost is adjusted alongside any change in on-hand quantity depending on the Cost Method assigned to a particular item, and on whether there is a positive or negative count variance.

Article #1151: Understanding How Physical Count Variances Affect Inventory Costs, discusses the inventory cost adjustment calculation and the adjusted inventory cost.