Cycle Count Law and Legal Definition

A cycle count is inventory management procedure wherein small subset of goods and materials kept in stock in a store is counted on a given day. In other words it is the method of verifying inventory accounts section by section throughout a year. Each portion is counted at a definite, preset frequency to ensure counting of each item at least once in an accounting period which is usually a year. Cycle count provides accuracy to inventory accounts. Usually fast-moving or more expensive items are counted more often than slower moving or less expensive ones, and certain items are counted every day. A cycle count will not disturb a store’s daily business.

Cycle counting allows counting of a number of items in a number of areas within a storehouse without counting the entire inventory. It is a sampling technique where count of a certain number of items will be assumed as a count of a whole storehouse. Control group, random sample and ABC analysis are the different types of cycle counting used under inventory management.

This is also termed as cycle inventory