Perform an Inventory Count in Wafeq

Accurate inventory records depend on keeping the quantities recorded in your system aligned with the quantities that actually exist in your warehouse. Over time, discrepancies may occur due to damaged goods, stock loss, data entry mistakes, or differences in the timing of inventory transactions.

Inventory Counts help you reconcile the physical quantities in your warehouse with the quantities recorded in Wafeq. Any discrepancies identified during the count can then be adjusted in an organized manner, while automatically updating inventory balances and generating the appropriate accounting impact.

In this guide, you'll learn how to create an Inventory Count, review inventory variances, post the count, and understand what happens after it is posted.

Before You Begin

Before creating an Inventory Count, it's important to understand when to use this feature and when another inventory feature may be more appropriate.

Use Inventory Counts when you:

• Have completed a physical stock count in your warehouse.
• Want to compare the actual stock on hand with the quantities recorded in Wafeq.
• Need to reconcile inventory discrepancies while recording the appropriate accounting entries.
• Perform periodic inventory counts, such as month-end or year-end stock counts.

Don't use Inventory Counts when you:

• Need to enter opening inventory balances.
• Want to correct a single inventory transaction.
• Simply need to increase or decrease inventory quantities without performing a physical stock count.

In these cases, Inventory Adjustments are the more appropriate option.

Why are there two similar features?

Inventory Counts are designed to record the results of a physical stock count. You simply enter the quantities you actually counted in the warehouse, and Wafeq automatically calculates the variance.

Inventory Adjustments, on the other hand, are intended for situations where you already know the quantity that needs to be added or deducted, without performing a physical inventory count.

How does an Inventory Count work?

Now that you know when to use Inventory Counts, let's take a quick look at the complete workflow before walking through each step.

The Inventory Count process follows these stages:

Physical stock count in the warehouse

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Create a new Inventory Count in Wafeq

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Add the products to be counted

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Enter the actual quantities

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Wafeq automatically calculates inventory variances

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Post the Inventory Count

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Inventory quantities are updated and the accounting journal entry is created

Create a New Inventory Count

Once you've completed the physical stock count in your warehouse, the next step is to record the results in Wafeq.

To do this:

1. From the main menu, go to "Inventory".
2. Select "Inventory Counts".
3. Click "New Inventory Count".
   
   
    

A new Inventory Count window will appear.

Review the following fields:

• Number: Automatically generated by Wafeq and can be used later to identify the Inventory Count.
• Warehouse: Select the warehouse where the physical count was performed.
• Count Date: Change the date if the physical count was performed on a different day.

When you're done, click "Save & Add Products".

Note: Inventory Counts are created separately for each warehouse. If you have multiple warehouses, you'll need to create a separate Inventory Count for each one.


 

Add Products to the Inventory Count

After creating the Inventory Count, you're ready to add the products you counted.

The Add Products window displays all products available in the selected warehouse. Select the products you want to include, then click Add.

If you only want to work with products that currently have inventory movements, disable Include Zero Quantity Products.

Review the Inventory Count Details

After adding the products, the Inventory Count screen displays both the count information and the products included in the count.

Before posting the Inventory Count, you can review or update the following information:

• Number: An automatically generated reference number used to identify the Inventory Count.
• Warehouse: The warehouse being counted. To count another warehouse, create a separate Inventory Count.
• Count Date: The date used to calculate the expected quantities and the posting date of the Inventory Count.
• Reference (Optional): Enter an internal reference number or any information that helps identify this Inventory Count.
• Notes (Optional): Add general notes about the Inventory Count, such as its purpose or the team that performed it.

• Account: Choose the account that will record the accounting impact of inventory variances.

• You can choose between:

• Same for all lines: Use one offset account for every product.

• Per line: Assign a different account to each product. For example, damaged products can be posted to one account, while lost inventory can be posted to another.

  If you choose Per line, an Account field will appear beside each product.

Review the Expected Quantities and Enter the Counted Quantities

After adding the products, Wafeq displays all selected products together with information that helps you compare the recorded inventory with the physical count.
 

What do the columns mean?

Each product displays the following information:

• Product: The product being counted.
• Expected: The quantity Wafeq expects to exist in the selected warehouse as of the Inventory Count date and time.
• Counted: Enter the quantity you physically counted.
• Variance: The difference between the expected and counted quantities. This value is calculated automatically as soon as you enter the counted quantity.
• Unit Cost: The product's average cost for the selected warehouse. Wafeq uses this value to calculate the financial value of the inventory variance when the Inventory Count is posted.
• Note: The Unit Cost shown in an Inventory Count is calculated using the product's average cost in the selected warehouse as of the Inventory Count date. Because of this, it may differ from the Unit Cost shown elsewhere in Wafeq.
• Notes: Record the reason for the variance, such as damage, loss, expired inventory, or any other relevant note.

Enter Quantities Using Multiple Units of Measure

If a product has multiple units of measure, you can enter the counted quantity using any of those units—or even combine multiple units in the same count—as long as those units have already been configured for the product.

In the previous example, Orange Juice was counted using both Bottles and Cases. Wafeq automatically converts all units into the product's base unit before calculating the final counted quantity and inventory variance.

Note: Expected quantities are based on all inventory transactions recorded up to the Inventory Count date and time. If backdated inventory transactions are posted after the Inventory Count is created, click Recalculate Expected before posting to refresh the expected quantities.

How Wafeq Calculates Inventory Variances

As soon as you enter the counted quantities, Wafeq calculates the inventory variance automatically.

For each product:

• If the counted quantity is lower than the expected quantity, the variance is negative.
• If the counted quantity is higher than the expected quantity, the variance is positive.
• If both quantities match, no variance is recorded.

In this example:

• Olive Oil: Expected quantity is 147 bottles, while the counted quantity is 142 bottles, resulting in a variance of −5 bottles.
• Biscuits: Expected quantity is 39 pieces, while the counted quantity is 35 pieces, resulting in a variance of −4 pieces.
• Orange Juice: Expected quantity is 96 bottles. The product was counted using multiple units by entering 10 bottles and 9 cases (1 case = 12 bottles). Wafeq automatically converted both units into the base unit and calculated a +22 bottle variance.
• Chocolate Bars: The expected quantity is 99 pieces, which matches the counted quantity, so no variance is recorded.

Post the Inventory Count

After reviewing all counted quantities and variances, click "Save & Post" or "Save as Draft".

When the Inventory Count is posted, Wafeq automatically:

• Updates inventory quantities to match the physical count.
• Creates the accounting entry for the inventory variances.
• Records the transaction in inventory history.
   

Review the Accounting Entry

After posting the Inventory Count, you can review the journal entry generated by Wafeq.

Hover over the Journal Entry icon next to the Inventory Count to open the related journal entry.
 

What Does the Journal Entry Include?

The journal entry reflects the accounting impact of the inventory variances on both the inventory account and the offset account you selected (such as Inventory Shrinkage Expense).

The direction of the journal entry depends on the inventory variance:

• If the counted quantity is lower than the expected quantity, Wafeq records a decrease in inventory together with an inventory variance expense.
• If the counted quantity is higher than the expected quantity, Wafeq records an increase in inventory together with the corresponding offset entry.

Can You Edit a Posted Inventory Count?

Yes.

If you need to modify a posted Inventory Count, you can return it to Draft, make the required changes, then post it again.

After an Inventory Count is posted, the inventory quantities in Wafeq match the quantities physically counted in the warehouse. At the same time, the accounting impact of any inventory variances is recorded automatically, helping maintain accurate inventory records and reliable financial reporting.