Cycle counting: how to count the warehouse without closing it

November 2, 2026 · 6 min read

Cycle counting means counting one part of the warehouse every day instead of closing it once a year to count everything. The stock is corrected little by little, without stopping operations.

What cycle counting is

It is a calendar of counts. Every day (or every week) a group of bins or items is due to be counted; when the cycle is complete you have been through the whole warehouse, and through what matters most several times. It is also called cyclic counting or rotating inventory.

The underlying idea is that a mismatch is easier to fix the sooner it is found. If you find it within a week, you can still look at which orders went through that bin. If you find it in the December count, all you can do is adjust the figure.

Cycle counting or annual count

Swipe the table sideways to see all the columns →

	Annual count	Cycle counting
When it is counted	Once, everything in one go	A little every day or every week
The warehouse	Closed while it lasts	Open
Who counts	The whole team, often on overtime	One or two people, within the shift
When errors show up	Months later	Within a few days
Can the cause be found	Almost never	Often
Stock reliability	Good the next day and worse every month	Stable all year round

If your company has to do a year-end inventory for the accounts, ask your accountant what is required of you. Even so, reaching that day with the stock already matching turns it into a formality.

What to count and how often: the ABC method

Not everything deserves the same effort. The usual way is to rank the items by turnover (how many times they are picked) or by value, and split them into three classes:

→A: the few items that account for most of the movement or the value. They are counted most often.
→B: the ones in between. They are counted from time to time.
→C: most SKUs, which move little. They are counted at least once per cycle.

To work out how many counts are due per day: for each class, multiply the number of bins by the times you want to count them a year, add it all up and divide by the working days. If the result does not fit in the time you can spare, lower the frequency of class C before that of class A.

Other criteria for choosing what to count

→By incident: the bin where an order did not find the product is counted that same day.
→By zero bin: when the system says a bin has been left empty, checking it takes a second.
→By zone: one whole aisle or rack every day, in order. It is the simplest to organize.
→By value or risk: items that are expensive, small or easy to mix up.
→Before a peak: the SKUs that are going to ship the most.

How to do a count step by step

1. Pull the day's list. The bins due by calendar plus the ones that come from incidents.

2. Make sure the bin is “still”. No half-finished picks or put-aways, or the difference will be false.

3. Count blind. The person counting does not see the expected quantity, so they are not swayed by it.

4. Compare. If it matches, the bin is confirmed. If not, before adjusting it is counted again, preferably by someone else.

5. Look for the cause. Check the neighboring bins (the product is usually right next door), recent inbound deliveries and the last orders that went through there.

6. Approve and adjust. A manager approves the adjustment, especially if it is negative, and who, when and why is recorded.

Common mistakes

→Counting while seeing the expected quantity: you end up confirming what the screen says.
→Adjusting without looking for the cause: the mismatch comes back the following month.
→Counting units when the product is in boxes, or the other way round.
→Stopping counting as soon as things get busy. Counting is the first thing dropped in peak season and the thing most needed afterwards.
→Having the same person count and approve.

How to tell whether it works

With a single number: inventory accuracy, that is, bins counted that match ÷ bins counted × 100, week by week. If it goes up, the method works. If it stalls, look at which zone or which type of product the differences are concentrated in. It is with the rest of the KPIs in warehouse KPIs.

Faster with a PDA

With the PDA the operator scans the bin, counts and records. The software compares with what was expected and leaves any difference pending approval. In Ubika counts are done this way: the software suggests which bins to count, giving priority to the items with the highest turnover (classes A, B and C), the count is blind, downward differences are always left pending approval by a manager and every adjustment stays in the history. When an operator reports goods missing while picking an order, an alert is raised to count that bin. More in stock control with a PDA; and if your bins do not yet have clear numbering, start with how to organize the locations.

Frequently asked questions

What is cycle counting?

It means counting the warehouse in parts, a little every day or every week, following a calendar, instead of stopping it once a year to count everything. By the end of the cycle the whole warehouse has been counted, and the important things several times.

What is the difference between cycle counting and the annual count?

The annual count covers everything at once, with the warehouse closed, and finds the errors months after they happened. Cycle counting spreads the work out, does not force you to close and finds the mismatches while the cause can still be traced.

How often is each item counted?

It depends on its class. The usual way is to classify by turnover or by value (A, B and C) and count the A items several times a year, the B items less often and the C items at least once. You set the exact frequency according to what goes out of line.

What is a blind count?

A count in which the operator does not see the quantity the system expects. They count, enter what is there and it is the software that compares. It prevents the expected figure from being accepted without really counting.

Do you have to stop the warehouse to do cycle counting?

No. You count bin by bin at quiet times. You only have to make sure there are no half-finished movements in the bin being counted.

Who approves inventory adjustments?

A manager other than the person who counts, especially when the adjustment is downward or for a large amount. Before approving, a second count is advisable.

Keep reading

What Ubika does: warehouse management software · software for 3PLs · WMS for e-commerce