The “ideal” process to follow for physical count is:

• Post all transactions involving inventory so what’s in Sage 100 matches what you should have on hand.  Stop moving inventory too (nothing in and nothing out).
• Freeze (and stop entering inventory transactions, but SO / PO are fine… just no shipments / invoices / receipts / transfers / adjustments…).
• Do the count (write down the numbers).
• Resume normal transaction entry / posting.
• Enter the physical count numbers (data entry), print the Variance report, and post it.

The Physical Count variance is checking the counted amount against the frozen amount (which is really just a snapshot of inventory at that point in time) set at the start of the process.  The current quantity on hand is not part of the process, after the items are frozen.

If I did not freeze the items and we did a physical count and uploaded it would it add the inventory counted to the inventory on hand.

I believe Sage will take the current QoH at the time of the import (regardless of any unposted transactions) as the beginning quantity, but I'm not sure on that.

If you had not frozen your inventory counts, and instead just added your "new counts" to the Inventory Physical Count Entry Screen, Sage will process a transaction that "adds" to inventory the quantity difference between what was "frozen" and what you "counted".  If the "Quantity on hand" = zero, and your "Qty Counted" = 10 (as an example); the update will +10 to inventory as an IP transaction.  I'd suggest copying your company to a test company, then posting the physical count variance to see what gets "added" and the GL Impact, prior to posting in your live company. 

Thank you