What is Annual Inventory Count?

An Annual Inventory Count is a process where a business physically counts and verifies all the items in its inventory once a year. This count is typically done at the end of the fiscal year to ensure that the recorded inventory numbers in the company’s financial statements match the actual physical inventory. The process helps identify discrepancies due to loss, theft, or errors in inventory records, allowing the business to adjust its inventory and financial records accordingly. It’s an essential part of inventory management, helping businesses maintain accurate stock levels and financial data.