1. About
Sometimes, physical stock counts reveal differences between actual inventory and recorded values. If your inventory balance recorded in Finaloop doesn’t align with your physical inventory count, don’t worry! The Physical Count Adjustment tool helps you reconcile your recorded inventory based on your physical stock count.
Whether you track your inventory using our sales based COGS method or using InventoryIQ, this tool ensures your inventory value is accurate and compliant for bookkeeping and tax purposes.
Below, you’ll find step-by-step instructions for both inventory methods.
2. Sales based COGS
If the value of your inventory on hand based on a physical count of your inventory is different than your inventory balance in Finaloop, our Physical Count Adjustment tool helps you resolve this quickly and accurately by adjusting your inventory in Finaloop to align with your actual count.
Steps to Adjust Inventory
Navigate to the Physical Count tab on the Inventory screen.
Click +Add New Count to create a new adjustment.
Select the date of your count—this could be any date the physical inventory was taken. This will be the date we record the adjustment in your books.
Review the original inventory value displayed which is the value recorded in Finaloop before this adjustment. Enter the updated inventory value based on your count.
If you know your unit counts but aren’t sure about your total inventory value, use our built-in calculator to help you easily calculate the value of your inventory.
Click on "Calculate Based on Units and Costs" and you'll see all your synced products from Shopify and Amazon and any products you added to Finaloop.
Input updated unit counts for each product. If you have additional products that you don’t see, click on Filter and select the “inactive” products as well.
Important: To get an accurate total, ensure all products in your warehouse during the count are included. Leaving out products will result in a partial inventory value.
You can also upload counts in bulk via CSV by selecting Actions > Import CSV and following the steps provided.
The calculator automatically multiplies each product’s quantity by its cost-per-unit (as recorded in Finaloop) and gives you the total inventory value.
Add notes or attachments for each count to keep records organized.
Click Save to finalize your adjustments.
We'll adjust your inventory value to reflect the updated value. The adjustment will result in a corresponding impact to your COGS so everything is reconciled accurately.
Important note:
After saving, the updated inventory value is “frozen” as of the selected date, ensuring accuracy for that period.
Example:
If your original inventory value was $5,000 and you adjusted it to $4,000, the new value of $4,000 will be recorded (i.e., a negative adjustment of $1,000). If you later make changes to historical data affecting inventory (e.g., categorizing open expenses to inventory categories), the $1,000 adjustment will be modified to ensure the inventory value on that date remains $4,000.
If this occurs, a red dot will appear next to the Physical Count tab to notify you.
🎥 Watch the walkthrough tutorial here.
3. InventoryIQ
If your inventory on hand based on a physical count of your inventory is different than your inventory balance in Finaloop, our Physical Count Adjustment tool helps you resolve this quickly and accurately by adjusting your inventory in Finaloop to align with your actual count.
Steps to Adjust Inventory
Go to the Physical Count tab under Inventory.
Select the warehouse from the dropdown (note, since the counts must be done per warehouse, you won’t be able to enter a new count until you select a warehouse).
Enter the date of the physical count.
If any SKUs have units without costs on the selected date and for the selected warehouse, you’ll need to address this first. Visit the Products page for guidance on this before proceeding with the physical count adjustment.
Click +Add New Count to start the process.
Review the list of all products with activity in the selected warehouse as of the chosen date. If any products appear to be missing, apply a filter to include inactive products as well.
For each product:
Compare the current unit count in Finaloop with your physical count. If they aren’t the same, update the number. This will impact the inventory closing balance of those products on the date you entered.
If they are the same, you can mark it as accurate by checking the box using the Accurate number column or leave as is. Any unedited products will be assumed to have correct counts.
You can also bulk update the quantities by uploading data via CSV. Select Actions > Import CSV.
Save your adjustments to automatically update the inventory value and reconcile it with your physical count.
For each count, you can also add notes and attach relevant files.
Important note:
Once saved, the updated inventory value for that SKU is “frozen” as of the selected date.
This ensures accuracy even if historical data affects inventory changes. Any updates to past transactions will automatically adjust the inventory value to maintain consistency. Notifications for such changes will appear as a red dot next to the Physical Count tab and any impacted rows or products.
🎥 Watch the walkthrough tutorial here.
4. Viewing and managing physical counts
You can track your physical count changes on the Physical count page. Here you’ll see:
Date: The date of the physical count update.
Original inventory value: The inventory value recorded before the adjustment.
Adjustment: The difference added to your books based on the count.
Updated inventory value: The new total after the adjustment.
You can update physical counts at any time, as long as the books for the relevant year haven’t been closed.
5. Key Takeaways
The Physical Count Adjustment Tool ensures your inventory and COGS reflect real-world data.
For customers using our sales based COGS method, you can use the built-in calculator for quick value estimation based on product counts and costs.
Stay organized by adding notes and attachments for each count.
Rest assured, Finaloop’s safeguards will keep your data accurate, even when adjustments are needed.
As always, if you have any questions, just contact us at [email protected] for some support.