Stock counting and physical inventory in LS Central: journals, counts, and differences

Store operations · 6 min read

Every retail inventory drifts. A return scanned against the wrong variant, a case received as eaches, a sale that never left the offline queue — small leaks compound until the system quantity and the shelf quantity are telling different stories. The stock count is where the two get reconciled. In LS Central there are two counting tools, and picking the right one matters more than the counting itself.

Two counting systems, one store

LS Central stores count in Store Inventory: worksheets built on LS Retail's own tables rather than the standard Business Central tables. LS documents this as a deliberate design — processing is faster and the worksheet doesn't lock the standard tables while staff work. One worksheet can hold ten inventory types (Counting, Positive and Negative Adjustment, Transfer, Purchase, and more), and multiple users can work in the same worksheet at the same time.

Business Central also has its own counting tool, the Physical Inventory Journal, which works directly against the item ledger and is the tool finance reaches for at period end. Both post real adjustments; they differ in where the work happens:

The working rule: if the count happens in a store, count it in Store Inventory. Reach for the BC journal when the count is a finance exercise, or for a location that isn't set up on Store Inventory (it's activated per setup, via the Store Inventory Setup page).

Normal count, cycle count, and areas

A counting worksheet has a type (Counting) and one of two methods. A normal count puts every item in the loop: the Get items action lists all items on file, you filter and select, and only the selected lines are created in the worksheet journal. A cycle count is narrower by design — it only works when cycle count items are set up and a Physical Inventory Counting Period is linked to the worksheet, and the count is then limited to the items in that counting period. Cycle counting is how a store avoids the annual shutdown count: small, frequent counts of a rotating slice of the assortment.

Which items belong in a counting period is a judgment call the system can't make for you. A practical pattern: high-value and fast-moving items get counted often, slow and cheap items rarely — the goal is that no item goes a full season without eyes on it, and the items most likely to be wrong get checked while the trail is still warm. Set the periods up once and the cycle count largely runs itself.

Both methods can be counted by area. The area concept exists because the same item often lives in several places — a display, a shelf, a stock room. Split the floor into named areas, assign each area to a staff member, and nobody counts the same display twice or assumes someone else did.

The count, step by step

1. Pick the moment. Count when the sales picture is complete: statements calculated and posted for the period you're counting against, and no terminal sitting on an unuploaded offline queue (see our offline mode checklist). A count taken against a half-posted day manufactures differences that don't exist.
2. Create the worksheet. Open Store Inventory Worksheets from the Store Inventory menu, select or create a worksheet of type Counting, and open it with Edit Journal.
3. Load the lines. For a normal count, use Get items, filter to what you're counting, and select the lines — only selected lines are created. For a cycle count, confirm the counting period is linked so the right items are in scope.
4. Assign areas. If the worksheet uses areas, hand each area to one person. One owner per area, no overlaps.
5. Count. On the Mobile Inventory app: open Stock Counting, scan or enter the item number, enter the counted quantity, and Send. Worksheets can be worked offline and sent when the device is back online. Counting directly in the journal works too.
6. Review before posting. The worksheet journal shows Qty. Calculated (what the system believes) next to Qty. (Physical Inventory) (what was counted). Work the differences now, not after posting — the next section is the whole job.

When the numbers don't match

A difference is a question, not an adjustment waiting to happen. Posting it without an answer just moves the error somewhere else — clean data is the most useful thing a count can produce, and a count posted against the wrong item or variant corrupts the record it was meant to fix. Work differences in this order:

• Recount the big ones. Any line where the gap is large in units or value gets a second count by a different person before anything else happens. Most big differences are count errors, not shrinkage.
• Check for unposted sales. Transactions still sitting in an offline queue or an uncalculated statement make the shelf look emptier than the system. Verify the transaction flow is complete (our end-of-day routine covers the statement side) before treating a shortfall as real.
• Check the paperwork. A delivery received but not posted, or a transfer received at the wrong store, shows up as a count difference at both ends. Match recent receiving and transfers for the items in question.
• Check identity. Right product, wrong variant or wrong barcode is the classic retail counting error — the item is there, it's just recorded as its sibling. A surplus on one variant next to a shortage on another is the signature.
• Then, and only then, accept the difference. What's left after the checks is genuine shrinkage or damage — that's the number the business needs to see, not a padded one.

Posting the result and verifying it

In the worksheet, edit Qty. (Physical Inventory) on the lines where the verified count differs, then use the Proceed/Post action. After posting, verify the adjustment actually landed: open the Item Ledger entries, filter by date, and confirm the adjustment entries match the worksheet. If they don't, stop — don't recount on top of a posting problem.

Counting in the BC Physical Inventory Journal instead? Run Calculate Inventory from Prepare to build the lines (it can include items with zero recorded inventory, and can be filtered by item, location, or dimension). The journal prefills Qty. (Phys. Inventory) equal to Qty. (Calculated) — you only touch the lines where the count differs, then post. A quick one-off correction that isn't part of a formal count belongs in the Item Journal instead, where positive and negative adjustments to quantities are posted directly — different tool, same ledger.

What success looks like

• Every line in scope was counted, or explicitly excluded — nothing silently skipped.
• Every material difference was recounted and explained (unposted sale, paperwork, identity, or real shrinkage) before posting.
• Item Ledger entries filtered by the posting date match the worksheet totals.
• The next count is already scheduled — a cycle-count rhythm, not an annual event.