lathe spindle encoder/7i76e setup

how would one verify an encoder has been properly set-up? encoder position in the open loop test gives a feedback of .004 per turn and none of the hal meter rps or rpm gives what I would expect, very small numbers. using encoder hedl 5640 a13 500ppr.

If you don't get 2000 raw counts per turn with a 500 PPR encoder. its
likely that there is an electrical/wiring issue, possibly a mismatch between
7I76E encoder type settings and your encoder or a wiring error.

Thanks for your reply, wiring was good. Turns out that the encoder is very sensitive to how its mounted.