Managing inventory is about more than keeping the shelves stocked. After staff compensation, inventory is frequently noted as the second highest expense for veterinary hospitals, ranking it as both a critical component and high-cost of doing business.

Proper inventory management is essential in veterinary medicine for preventing diversion, reducing waste and optimizing profitability; all of which result in improved cashflow and help ensure that necessary medications and supplies are available for patient care.

For many veterinary professionals, the thought of conducting “inventory” creates an automatic cringe effect, tied to thoughts (and for some memories) of hours spent  counting tablets, drawing up liquids and essentially cleaning out and organizing every shelf and drawer in the facility. GOOD NEWS - cycle counting is not that kind of inventory; so, to all of the veterinary professionals who have lost precious hours and days in the name of “performing inventory”, keep reading!

This article explains what cycle counting is, why it matters for veterinarians, and how to successfully implement inventory cycle counts into your hospital.

Inventory Cycle Counting

What exactly is inventory cycle counting? No different than when a full inventory is conducted, the goal of cycle counting is to identify and reconcile differences by comparing physical counts (actual inventory) against what is reflected in your recorded log data (expected inventory). However, instead of counting all of your inventory at once, cycle counting is an inventory auditing method that focuses on counting a small portion of items on a recurring basis, a systematic way of verifying your inventory records versus having to shutdown operations to conduct a full physical inventory.

Cycle counts allow you to schedule and select smaller portions of inventory items to count throughout the year so that over a period of time every inventory item is physically counted and reconciled. Any discrepancies identified are investigated as they are discovered and either thoroughly resolved or reported as appropriate based on the item if the discrepancy cannot be brought to resolution.

For busy veterinary hospitals trying to keep up with patients, inventory and the many other compliance requirements you must adhere to, cycle counting can provide a more practical and efficient approach to maintaining inventory control without the disruption and time-consuming efforts that a complete physical inventory count requires. Cycle counting helps ensure that controlled substances, high-value items, and frequently used supplies are consistently being accounted for; reducing the risk of shortages, waste, and potential compliance issues. In simple terms, cycle counting is a way for hospitals to better answer a critical, underlying question: Do our records match what’s actually on the shelf?

PLEASE NOTE: inventory cycle counts are not a substitute for completing required inventories such as a DEA biennial inventory as required per 21 CFR 1304.11(c) and/or any state-required inventories that must also be conducted depending on where you are licensed to practice.

Why Cycle Counting Matters in Veterinary Practices

Veterinary hospitals face unique inventory challenges. Medications with strict DEA logging requirements, consumables that move quickly, and costly items like anesthetics or surgical supplies make inventory accuracy vital. When records don’t align with reality, the consequences can include compliance violations, patient care delays, and unnecessary expenses.

Cycle counting creates a reliable framework for maintaining inventory accuracy while minimizing disruption to daily operations. By catching errors more frequently and ensuring critical items are available when needed, hospitals can improve both efficiency and the overall standard of care.

Common Methods of Cycle Counting

Veterinary hospitals can choose from several cycle counting methods, each suited to different goals and inventory challenges.

ABC Cycle Counting focuses on categorizing items into groups based on their importance. High-value or frequently used supplies are counted more often, while lower-value items are counted less frequently. This approach ensures the most critical items always receive extra attention.

Random Sample Cycle Counting relies on selecting items at random to check for accuracy. This method uncovers discrepancies across the entire inventory without introducing bias toward certain categories.

Control Group Cycle Counting narrows the focus to a specific set of items, counting them repeatedly to spot systemic errors or weaknesses in your counting process.

Usage-Based Counting emphasizes items most commonly used in veterinary care, such as vaccines, antibiotics, or anesthesia. By prioritizing high-use items, hospitals can reduce the risk of stockouts.

Many hospitals find that hybrid approaches, such as combining ABC analysis with usage-based counts, strike the right balance between efficiency and accuracy.

Best Practices for Veterinary Inventory Accuracy

The success of cycle counting depends on a well-structured process. Veterinary teams should define clear procedures, assign responsibility, and maintain consistency in how counts are performed. Establishing a schedule is essential, whether it’s daily, weekly, or monthly, depending on the number of items and their importance to the hospital.

Teams should document discrepancies carefully, track patterns over time, and use an inventory management system to reconcile counts with digital records. This not only improves accuracy but also creates a foundation for auditing and accountability. When combined with training and accountability, these steps ensure that cycle counting becomes a dependable part of daily operations. A documented standard operating procedure for how discrepancies are identified and investigated should be implemented to ensure staff follow a consistent process the same time, every time.

Cycle Counting vs. Full Physical Inventory

Aside from the fact that full physical inventories must be conducted at certain times per DEA and state requirements, conducting full physical inventories can be useful in certain situations, but they also require significant staff time, can cause disruption, and can increase the risk of errors if rushed. Alternatively, cycle counting can offer a more efficient, sustainable approach to inventory by spreading counts out incrementally throughout the year; giving your team ongoing visibility and control without interrupting daily operations.

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Training Staff for Effective Cycle Counting

Well-trained teams deliver consistent results. If you want inventory cycle counts to work for your hospital, veterinary staff need to understand the importance of cycle counting and be trained on the proper procedures to follow when performing cycle counts as well as how to handle discrepancies when they are identified. Inform your staff. Train them on cycle counting processes by providing clear instructions. Reinforce processes with written procedures and delegates those procedures to specific staff for accountability purposes. Over time, a system of documented processes that staff have been properly trained on will generate a culture of accountability that helps every member of the team and contributes to better inventory management.

Compliance and DEA Logging Considerations

For veterinarians, DEA compliance is a non-negotiable responsibility. Controlled substances require precise tracking and reporting, and errors can result in serious consequences. Cycle counting offers a proactive way to monitor controlled substances regularly to ensure your inventory is secure and accounted for according to DEA requirements. Maintaining accurate physical inventory counts with thorough recordkeeping and controlled substance documentation is how veterinary hospitals reduce risk and achieve compliance success with federal and state regulatory boards.

Using Automation to Save Time and Improve Accuracy

Manual cycle counting can be time and labor-intensive, but automation makes it faster, easier, and more reliable. Automated inventory management systems track movement in real-time, reduce human error, and provide clear transaction records for auditing. By adopting automation, hospitals save staff time, improve accuracy, and free up resources to focus on patient care rather than paperwork.

Tools and Resources for Cycle Counting

Implementing cycle counting doesn’t have to be overwhelming. With the right tools in place, your team can achieve compliance, reduce errors, and keep inventory running smoothly. CUBEX provides the technology and support to make cycle counting simpler and more sustainable in busy veterinary practices.

How CUBEX Supports Effective Cycle Counting:

Real-Time Inventory Visibility

CUBEX’s cloud-based software (MashuraOS) tracks every transaction as it happens, so your team always knows exactly what’s on hand—no guesswork or manual spreadsheets.

Automated DEA-Compliant Logging

Controlled substances are dispensed through secure, biometric access points. Each transaction is automatically recorded; creating an audit-ready trail that adheres to DEA and state requirements.

Smart Cabinet Integration

With devices like the Mini, Flex, Buddy, and QLock, your hospital can capture counts across controlled and non-controlled items—including refrigerated medications and open-access supplies—within the same connected ecosystem.

Checklists & Standardized Processes

CUBEX provides built-in count templates and auditing workflows to help ensure that every team member follows consistent, efficient procedures.

Practice Support & Training

Beyond the technology, CUBEX offers dedicated veterinary support and onboarding resources, to help your staff implement cycle counting successfully without adding to their workload.

Final Thoughts: Building Smarter Inventory Habits in Your Hospital

Inventory cycle counting isn’t just about keeping numbers aligned; it’s about implementing a system, building smarter, more sustainable workflows that benefit your entire hospital. By adopting cycle counting into your processes, veterinary teams can increase accuracy, reduce waste, improve compliance, and ultimately provide better care for patients. Over time, these small, consistent steps will add up to big improvements in efficiency and peace of mind.

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