Counting and adjusting inventories using documents

It is possible to carry out physical inventory of items using inventory order and inventory record documents. An Physical Inventory Orders page is used to organize a complete inventory project, for example, per warehouse. An Physical Inventory Recording page is used to report and record the actual inventory of items. It is possible to create multiple entries for one order, for example, to assign item groups to different employees.

The Inventory Recording report can be printed from each record and contains empty quantity fields for entering inventory. When the user has completed the inventory and indicated the quantities entered on the Physical Inventory Recording page, they need to click Complete. This transfers the quantity to the corresponding lines on the Physical Inventory Orders page. The function ensures that no item inventory is recorded twice.

Using documents to perform a physical inventory provides additional control and supports inventory assignment to multiple employees. It is also possible to complete tasks using journals, such as the Physical Inventory Journals and Warehouse Physical Inventory Journals. For more information, see Counting, Adjusting and Re-classifying Inventory Using Journals. This article describes how to perform a physical inventory using documents.
If you are using zones, you cannot use physical inventory orders. Instead, use the Warehouse Physical Inventory Journals page to perform warehouse inventory before synchronizing it with item ledger entries.

Inventory using documents consists of the following stages:

1. Create inventory orders with already completed expected item quantities.
2. Create one or multiple inventory records from the order.
3. Enter the counted values of the item quantity in the record, as indicated, for example, in the printouts, and set the value to Finished.
4. Complete and post the inventory order.

Different G/L accounts for posting surplus and shortage

The Physical Inventory Order functionality makes it possible to use different G/L accounts to post surplus and shortage. To do it, do the following:

1. Open Inventory Setup page.
2. Fill in the Phys. Inv. Surplus Gen. Bus. Group and Phys. Inv. Deficit Gen. Bus. Group fields.
3. For the general business posting groups specified on the General Posting Setup page, fill in the Inventory Adjustment Account field.

Creating Physical Inventory Orders

Physical Inventory Order is a ready document consisting of the inventory order header and some inventory order lines. Information in the order header determines how inventory should be performed. The inventory order lines contain information about the items and their location.

To create inventory order lines, the Calculate Lines function is normally used to display the current stock as order lines. Besides, the Copy Document function can be used to fill in the lines with the contents of another open or posted inventory order. The following procedure outlines only the use of the Calculate Lines function.

1. Open the Physical Inventory Order page.
2. Click New.
3. Fill in the required fields on the General FastTab. In the Phys. Inv. Surplus Gen. Bus. Group and Phys. Inv. Deficit Gen. Bus. Group fields, business groups from default settings are used. However, they can be changed on the order.
4. Click Calculate Lines.
5. Select the required options.
6. Set the filters, for example, to enable only a subset of items subject to inventory with the first record.

To plan stock inventory for multiple employees, it is recommended to set different filters for every use of the action. Then, when creating multiple inventory records of multiple employees, the risk of double item posting is minimized. To learn more, see Creating Inventory Recording.

7. Click OK.

The line of each item stored in the selected warehouse is set for the order, according to the set filters. For the items set up for item tracking, the Use Item Tracking checkbox is marked, and the information about the expected quantity for serial and lot numbers is available when clicking Lines and then Item Tracking Lines. See additional information in the Processing Item Tracking during Stock Inventory section. Now you can proceed to create one or multiple records which are instructions for the employees performing actual inventory.

Using Default Signatures

The functionality makes it possible to use the Default Signature Setup page to set up employee signatures in the physical inventory order header. To do it:

1. Create a corresponding record on the page.
2. Select the required Table ID = Inventory Order Header.
3. Indicate the Employee Type and Employee No.

When creating a new physical inventory order, corresponding signatures will be created for it from the default settings. After posting, these signatures will be transferred to the Posted Physical Inventory Order.

Creating Physical Inventory Recording

For each inventory order, one or multiple inventory record documents can be created, by which employees enter the counted quantities, manually or using an integrated scanning device.
By default, a record is created for all lines of the corresponding inventory order. To prevent a situation when two employees take inventory of one item in case of assigned inventory, it is recommended to complete the inventory order gradually by setting filters of a Calculate Lines batch job, and then create an inventory order with marked Only Lines Not In Recordings checkbox. These settings ensure that every new record contains only the items different from the items in other records.
In the case of manual inventory, a list can be printed, an Physical Inventory Recording report that contains an empty column to record counted quantities. After the inventory, you enter the recorded quantities in related lines on the Physical Inventory Recording page. Finally, you transfer the registered quantities to corresponding inventory orders by setting the Finished status.

1. On the Physical Inventory Order page containing lines for the items to be counted in one record, click Create New Recording.
2. Select the required options and set filters.
3. Click OK. A Physical Inventory Recording Document is created.
4. Upload each set of items to be counted to a corresponding inventory order and repeat steps 1 to 3 after marking the Only Lines Not In Recordings checkbox.
5. Select Related > Order > Recordings to open the Physical Inventory Recordings List page.
6. Open the required record.
7. Fill in the fields on the General FastTab.
8. For the items using item tracking, create an additional line for each lot number or number series code by clicking Functions and then Copy Line. See additional information in the Processing Item Tracking during Stock Inventory section.
9. Click Print to prepare a physical document that employees will use to record counted quantities.

Completing Physical Inventory Recording

When employees have counted the stock quantities, it is necessary to prepare for recording to the system.

1. On the Physical Inventory Recordings List page, select an inventory record to be completed.
2. On the Lines FastTab, fill in the actual counted quantity in the Quantity field for each line.
3. For items with serial or lot number (marked Use Item Tracking checkbox), enter the counted quantities of special lines for serial and lot numbers of corresponding items. See Processing Item Tracking during Item Inventory for more information.
4. Mark the Recorded checkbox in each line.
5. After entering all data for inventory record, click Complete. Note that the Recorded checkbox must be marked in all lines.

After completing inventory recording, each line is transferred to a line of a corresponding inventory order. To ensure correspondence, values in the Item Code, Variant Code, Location Code and Bin Code fields must be similar in the record and order lines.
If a corresponding inventory order line exists and the Allow Recording Without Order checkbox is marked, a new line is inserted automatically and the Recorded Without Order checkbox is marked in a corresponding line of the inventory order. Otherwise, error messages are displayed, and the process is cancelled.
If multiple inventory record lines correspond to the inventory order lines, a message is displayed, and the process is cancelled. If, due to any reason, two similar inventory lines appear in the inventory order, function can be used to remedy the situation. For more information, see [Search duplicate inventory order lines].

Inventory Order Completion

After completing inventory recording, the Qty. Recorded (Base) field is updated with counted (recorded) values in corresponding inventory order and the On Recording checkbox is marked. If the counted value is different from the expected one, this difference is reflected in the Pos Qty. (Base) and Neg Qty. (Base) fields respectively.

To view expected quantities and any recorded differences for items with item tracking, click Lines and then Item Tracking Lines to select different views for serial and lot numbers involved in inventory counting.

Search duplicate inventory order lines

1. Open the Physical Inventory Orders page.
2. Open the inventory order for which duplicate lines must be viewed.
3. Select Related > Order > Show Duplicate Lines.

All duplicate inventory order lines are displayed so that it’s possible to delete them and keep only one line with a unique set of values in the Item No., Variant Code, Location Code and Bin Code fields.

Physical Inventory Order Posting

After completing the inventory order and changing its status to Finished, it can be posted. The Finished status can be set for the inventory order only if:

• all related inventory recordings have the Finished status;
• each inventory order line was counted at least in one inventory recording line;
• the In Recording Lines and Qty. Exp. Calculated checkboxes were marked for all lines of the inventory order.

1. Open the Physical Inventory Order page.
2. Select the inventory order to be completed and click Edit. On the Physical Inventory Order page, you can view the quantity registered in the Qty. Recorded (Base) field.
3. Click Finish. The value in the Status field changes to Finished, and now the order can be changed after clicking Reopen.
4. To post the order, click Post and OK.

Corresponding Item Ledger Entries are updated with all related item tracking records.

Viewing posted inventory orders

After posting, inventory order will be deleted, and it will be possible to view and assess the document as a posted inventory order, including its inventory record and all entered comments.

1. Open the Posted Physical Inventory Orders page.
2. On the Posted Physical Inventory Orders page, select a posted inventory order to be viewed, and click View.
3. To view the list of corresponding inventory recordings, click Recordings.

VAT Invoice

VAT Invoice can be created from a Posted Physical Inventory Order using the Create VAT Invoice button:

1. On the VAT Posting Setup page, create a corresponding record for a VAT Business Posting Group.
2. Indicate the required accounts, rate, calculation type, etc. for the record. See more information about VAT posting settings in Set Up Calculations and Posting Methods for Value-Added Tax.
3. Indicate the VAT Business Posting Group in the posted inventory order header.
4. Click Create VAT Invoice.

Printing documents from the inventory order

From the Posted and Non-posted Physical Inventory Order, you can print the following documents by clicking Print:

• Inventory Sheet
• Reconciliation Sheet
• Item Shipment
• Item Receipt

Processing item tracking during stock inventory

Item tracking refers to the serial or lot numbers of the assigned items. When taking inventory of an item held in stock, such as 10 different lot numbers, an employee must be able to record which and how many units of each lot number are in stock. For more information about item tracking, see Track Items with Serial, Lot and Package Numbers.

The Use Item Tracking checkbox on physical inventory order lines is marked automatically if the item tracking code is set for the item, but you can also select or clear it manually.

Example – preparing an inventory record for item with tracking

Let’s look into the inventory of Item A stored as ten different lot numbers.

1. On the item entry line, mark the Use Item Tracking checkbox.
2. In the Serial No. field, select the first serial number that exists in the item inventory, and click OK.
   Copy the line for the first tracked item to insert additional lines corresponding to the number of serial numbers held in stock.
3. Select Functions, then select Copy Line.
4. On the Copy Phys. Invt. Rec. Line page of the inventory recording, enter 9 in the No. of Copies field, and click OK.
5. In the first of the copied lines, in the Serial No. field, select the next serial number for the item.
6. Repeat step 5 for the remaining eight serial numbers so you don't select the same line twice.
7. Click Print to prepare a printout that employees will use to record counted items and serial or lot numbers.

Note that the Phys. Invt. Recording report contains ten lines for Item A, one for each lot number.

Example. Recording and posting the difference in inventory lot numbers

The lot-traceable item is stored in the warehouse with "LOT" number series. Expected inventory:

Lot No.	Quantity
LOT1001	80
LOT1003	30
LOT1006	10
Total	120

Recorded Quantities:

Lot No.	Quantity
LOT1001	80
LOT0002	12
LOT1003	20
LOT1006	10
Total	112

Quantities to Post:

Lot No.	Expected Quantity	Recorded Quantity	Quantity to Post
LOT1001	80	80	0
LOT1002	0	12	+12
LOT1003	30	20	-10
LOT1006	10	0	-10
Total	120	112	–8

On the Physical Inventory Order page, the Neg. Qty. (Base) field will contain 8. For the order line in question, the Phys. Invt. Item Track. List page for inventory will contain positive or negative quantities of individual lot numbers.

Inventory Documents

The following types of documents are useful in warehouse management:

• Use Inventory receipts to record positive item adjustments based on quality, quantity, and cost.
• Use Inventory shipments to write off missing or damaged items.

You can print these documents at any stage, release and reopen them, and assign general values, including dimensions, in the header. If you want to reprint documents after they have been posted, you can do so on the Posted Inventory Receipt and Posted Shipment Acts pages.

Before you can use these documents, you must specify a number series to generate their identifiers. For more information, see the following section.

Setting up Inventory Documents Numbering

Below is the procedure for setting up the numbering of inventory documents.

1. Open the Inventory Setup page.
2. On the Numbering FastTab, specify the following fields for the document number series:
   • Inventory Receipt Nos.
   • Posted Inventory Receipt Nos.
   • Inventory Shipment Nos.
   • Posted Inventory Shipment Nos.

Creating and Posting Inventory Document

The following procedure shows how to create, print, and post an inventory receipt (similar for inventory shipments).

1. Open the Inventory Receipts page.
2. In the header of the Inventory Receipt page, select a location in the Location Code field, then complete the remaining fields as needed.
3. On the Lines FastTab, in the Item field, select an item in inventory. In the Quantity field, enter the quantity of items to add.
4. To print the Inventory Receipt from the Inventory Receipt page, click Print.

The following functions are available on the Inventory Receipt page:

• Click Release or Reopen again to set the state of the next processing stage
• Click Post to post the item receipt act, or click Post and Print to post the receipt and print the test report.

Printing Inventory Documents

You can indicate reports to be printed at different stages by selecting one of the below options in the Usage field of the Report Selection - Inventory page:

• Inventory Receipt
• Inventory Shipment
• Posted Inventory Receipt
• Posted Inventory Shipment

See Also

Inventory Shipment
Inventory Receipt