What a cycle count is
Instead of counting the entire store at once, a cycle count checks a small section on a rotating schedule, so every part of the inventory gets counted regularly without ever closing for a full count.
Setting up a rotation
A workable rotation checks high-value or high-theft categories more often than slow-moving, low-risk ones.
- Highest-value or highest-theft category: weekly
- Mid-value categories: monthly
- Low-value, slow-moving categories: quarterly
- New or recently repriced items: counted at next opportunity
Recording variance with a reason
Every adjustment should get a reason code — damaged, expired, staff use, theft, counting error — recorded at the time of the count. Without a reason code attached, a shrink number tells you that something's wrong but not what to fix.
Setting a variance threshold
Not every small discrepancy needs investigation. A set threshold — by unit count or dollar value — separates normal counting noise from a variance worth digging into.
Tracing patterns over time
A single variance is often just human error. The same item or category coming up short repeatedly, especially on a consistent shift or day, is the pattern worth acting on.
Fixing the source, not just the count
If cycle counts consistently uncover shrink tied to receiving, retrain on receiving procedure. If it's tied to a specific display or shift, address that directly — the count is a diagnostic, not the fix itself.
Keeping counts fast enough to actually happen
A cycle count that takes hours won't get done consistently. Scoping each count to a section small enough to finish in well under an hour keeps the habit realistic for a busy team.