Performing a physical inventory involves physically counting the materials you have in store and comparing the inventory data that you gather during count with the data stored in your online inventory. The physical inventory process enables you to reconcile your online inventory with the actual stock on the shelves and in bins in your stores. This practice is commonly referred to as a cycle count.
After you finish the physical count, you can enter the actual physical quantities found in your cycle count. If you find that there are discrepancies between the Expected Qty. and the Physical Qty. of inventory items, you can reconcile all of the inventory discrepancies, and then approve the physical inventory record.