Once you install Possessions the first time, you should immediately login to each of your characters and open all your bags in your inventory and in your bank. Once Possessions has scanned all the information into it's database initially, all updating is then done on-the-fly. This is where the sheer beauty of Possessions begins to shine.
Let's suppose you're playing on your warlock who is an engineer, and someone in your guild is looking for silk cloth which would be stored in the bank of your tailor. You can either type "/poss" by itself to bring up a dialog box (and type "silk cloth" in the search field) or type "/poss silk cloth" right in the chat window. Possessions will give you a search engine style report of all the items you have that have "silk cloth" in the name. You can even "link" these results back into chat by shift-clicking the item icons in the search results. Mousing over these icons will give you the usual in-game description of the item, but at the bottom of the tooltip it will also tell you how many you have, and where the items are located on what character.
There are other options in the search dialog you can explore that accomplish a variety of other filtering tasks and that allow you to search a specific character or a specific location, but that's for you to play with later. Packrats of Azeroth, download Possessions today! I should note that I've hot-linked a much larger screenshot of the Professions search window to the tooltip thumbnail above. Click it to behold the true beauty of Possessions!