Inventory

Release 2011
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Publication Date
March 2011
 Table of Contents iii

Contents
Before You Begin 1
Inventory Overview .......................................................................................................................... 1
User Guide Overview ....................................................................................................................... 2
What is Covered in the User Guide? ................................................................................ 2
Who Should Use the User Guide? .................................................................................... 2
Inventory Module Organization ...................................................................................................... 3
Using Wildcard Characters ............................................................................................................. 4
Operating Tips ................................................................................................................................. 5
Structuring Inventory Coding ............................................................................................ 5
Assigning Roles and Access Authority ............................................................................. 7
Lot or Serial Numbered Items .......................................................................................... 8

Concepts: How This Module Works 11

Interaction with Other Modules .................................................................................................... 11
Required Modules........................................................................................................... 11
Optional Modules ............................................................................................................ 12
Inventory Interaction Diagram........................................................................................ 17
Inventory Transactions.................................................................................................................. 18
Inventory Setup Considerations ................................................................................................... 20
Inventory Items ............................................................................................................... 21
Global Inventory Information .......................................................................................... 25
Inventory Setup Options ................................................................................................. 26
Inventory Processes ...................................................................................................................... 28
Physical Inventory ........................................................................................................... 29
Inventory Costing ............................................................................................................ 31
Keeping Your System Running Smoothly ...................................................................... 34
Customer Priority Scheduling ....................................................................................................... 35
Setting Customer Priority Scheduling ............................................................................ 35
Quantity Available Calculation........................................................................................ 36
General Planning Concepts with CPS On ...................................................................... 36
General Planning Concepts with CPS Off ...................................................................... 37

Task Guidelines 39
Quick Reference Task List ............................................................................................................ 39
How Do I Assign...? ......................................................................................................... 39
How Do I Define...? ......................................................................................................... 39
How Do I Enter...? ........................................................................................................... 39
How Do I Handle...? ........................................................................................................ 40
How Do I Look Up...? ....................................................................................................... 40
How Do I Print...? ............................................................................................................ 40
How Do I Revise...? ......................................................................................................... 40
How Do I...? ..................................................................................................................... 40

Setting Up and Starting Inventory 41

Setting up Required Modules ....................................................................................................... 41
Defining User and Group Access Rights ........................................................................ 41
Defining Material Types .................................................................................................. 42
Defining Tax Categories .................................................................................................. 42
Defining Code Segments for Inventory IDs and Subaccounts ..................................... 43
Defining Inventory Accounts and Subaccounts ............................................................ 43
Selecting Process Options and Defaults ....................................................................... 44
Defining Global Inventory Information ........................................................................... 46
iv Inventory

Initializing Inventory ........................................................................................................ 51

Setting up Optional Modules ........................................................................................................ 54

Running and Maintaining Inventory 55

Introduction to Running and Maintaining Inventory .................................................................... 55
Processing Transactions ............................................................................................................... 55
Entering Receipts ............................................................................................................ 55
Entering Issues ................................................................................................................ 56
Entering Adjustments ...................................................................................................... 58
Entering Transfers ........................................................................................................... 59
Entering Kit Assemblies .................................................................................................. 59
Entering Project Inventory Allocations ........................................................................... 60
Lot/Serial Number Maintenance .................................................................................................. 62
Assigning Lot/Serial Numbers ........................................................................................ 62
Changing Lot Numbers ................................................................................................... 62
Updating Lot/Serial Number Status............................................................................... 63
Inventory Batches .......................................................................................................................... 64
Editing and Voiding Inventory Batches .......................................................................... 64
Releasing Inventory Batches .......................................................................................... 64
Reprinting Batch Control Reports .................................................................................. 65
Revising Costs ............................................................................................................................... 66
Revising Pending Costs................................................................................................... 66
Revising Standard Costs ................................................................................................. 66
Revising Standard Costs for an Individual Item or Site ................................................ 67
Performing Inquiries ...................................................................................................................... 68
Item Inquiries .................................................................................................................. 68
Status Inquiries ............................................................................................................... 70
Project Allocated Inventory Inquiries.............................................................................. 71
Generating and Printing Reports .................................................................................................. 72
Closing Inventory ........................................................................................................................... 73
Validating Inventory (Integrity Checking) ....................................................................... 73
Pre-Closing Inventory ...................................................................................................... 73
Rebuilding Inventory ....................................................................................................... 74
Closing Inventory for the Period or Year ........................................................................ 74
Deleting Inventory Items from the Database................................................................. 75

Performing a Physical Inventory 77

Introduction to Performing a Physical Inventory .......................................................................... 77
General Physical Inventory Procedures........................................................................................ 77
Selecting Items or Locations to Count ........................................................................... 77
Printing Count Sheets and Tags ..................................................................................... 78
Recording Physical Inventory Counts ............................................................................. 79
Updating Inventory with Adjustments ............................................................................ 79
Specific Physical Inventory Procedures........................................................................................ 80
Defining ABC Codes ........................................................................................................ 80
Defining Movement Classes ........................................................................................... 81
Defining Cycle IDs ........................................................................................................... 81
Marking Items/Locations to Never Count ..................................................................... 81
Handling Unexpected Items and Items in Unexpected Locations ................................ 82
Using Tag Control ............................................................................................................ 83
Handling Items with Quantity-on-Hand of Zero.............................................................. 83
Deleting Physical Inventory Detail .................................................................................. 84
Reprinting Lost or Damaged Tags .................................................................................. 84

Data Entry Screens 85

Purpose of Data Entry Screens ..................................................................................................... 85
Receipts (10.010.00).................................................................................................................... 85
 Table of Contents v

Issues (10.020.00) ....................................................................................................................... 91

Adjustments (10.030.00) ............................................................................................................. 99
Transfers (10.040.00) ................................................................................................................ 106
Kit Assembly (10.050.00) .......................................................................................................... 112
Lot/Serial Assignment (10.070.00) ........................................................................................... 121
Create New Numbers (10.070.01) .............................................................................. 123
Project Inventory Allocation (10.080.00) .................................................................................. 124
Bin/Lot/Serial Assignment (10.080.01) ..................................................................... 127
Project Inventory (10.200.00) .................................................................................................... 128

Inquiry Screens 131

Purpose of Inquiry Screens ......................................................................................................... 131
Inventory Item Lookup (10.210.00) ........................................................................................... 131
Inventory Item Lookup, Lookup by Description Tab .................................................... 133
Inventory Item Lookup, Lookup by Attribute Tab ........................................................ 136
Inventory Status Inquiry (10.220.00) ........................................................................................ 138
Location (10.220.01) ................................................................................................... 145
Costs (10.220.02) ........................................................................................................ 146
Work Order Detail Inquiry (10.220.03)........................................................................ 149
Quantity Details (10.220.04) ....................................................................................... 154
Physical Inventory (10.220.05).................................................................................... 156
Replenishments (10.220.06) ...................................................................................... 157
Inventory Transaction Inquiry (10.223.00) ............................................................................... 159
Inventory Allocated to Projects Inquiry (10.224.00) ................................................................. 163
Activity (10.224.01) ...................................................................................................... 166
Lot/Serial History (10.224.02) .................................................................................... 168
OM Documents (10.225.00) ...................................................................................................... 170
OM Documents, Sales Orders Tab ............................................................................... 172
OM Documents, Shippers Tab ..................................................................................... 174
Purchase Order Detail Inquiry (10.227.00) ............................................................................... 176
Lot / Serial (10.229.00) ............................................................................................................. 179
Lot / Serial, Quantities Tab .......................................................................................... 181
Lot / Serial, Transaction History Tab ........................................................................... 183
Inventory Item History (10.251.00) ........................................................................................... 185

Maintenance Screens 187

Purpose of Maintenance Screens .............................................................................................. 187
Inventory Items (10.250.00) ...................................................................................................... 187
Inventory Items, Information Tab ................................................................................. 189
Inventory Items, Quantities Tab ................................................................................... 194
Inventory Items, Cost/Price Tab ................................................................................... 197
Inventory Items, GL Accts Tab ...................................................................................... 201
Inventory Items, OM Accts Tab ..................................................................................... 203
Inventory Items, Replenishments Tab ......................................................................... 205
Inventory Items, Physical Cycle Tab ............................................................................. 214
Inventory Items, Shipping Tab ...................................................................................... 216
Inventory Items, Size/Style/Color Tab ......................................................................... 218
Inventory Items, Item Defaults Tab .............................................................................. 220
Inventory Items, Seasonality Tab ................................................................................. 222
Lot/Serial Number Setup (10.250.01) ...................................................................................... 223
Inventory Sites (10.255.00) ....................................................................................................... 226
Inventory Sites, Information Tab .................................................................................. 228
Inventory Sites, Quantities Tab .................................................................................... 231
Inventory Sites, Physical Inventory Tab ....................................................................... 235
Inventory Sites, IN Accounts Tab ................................................................................. 237
Inventory Sites, Costs Tab ............................................................................................ 239
Inventory Sites, Replenishment Parameters Tab........................................................ 242
vi Inventory

Inventory Sites, Replenishment Values Tab ................................................................248

Unit Conversions (10.270.00) ....................................................................................................252
Product Classes (10.280.00) .....................................................................................................255
Product Classes, Item Defaults Tab .............................................................................257
Product Classes, GL Accounts Tab ...............................................................................260
Product Classes, Rate Defaults Tab.............................................................................262
Product Classes, Class Defaults Tab ...........................................................................263
Lot/Serial Number Setup (10.280.01) ......................................................................................264
Attribute Definitions (10.282.00) ...............................................................................................266
Physical Attributes (10.285.00) .................................................................................................268
Product Lines (10.286.00) .........................................................................................................270
Product Managers (10.287.00) .................................................................................................272
Sites (10.310.00) ........................................................................................................................273
Sites, Information Tab ...................................................................................................274
Sites, OM Accounts Tab ................................................................................................276
Sites, Replenishment Tab .............................................................................................278
Sites, Seasonality Tab ...................................................................................................283
Site Group (10.315.00) ..............................................................................................................284
Kits (10.320.00)..........................................................................................................................286
Assembly Plans (10.330.00) ......................................................................................................289
Warehouse Bin Locations (10.340.00)......................................................................................291
Reason Codes (10.350.00) ........................................................................................................295
Lot / Serial Numbers (10.360.00) .............................................................................................296
Item Cross References (10.380.00) ..........................................................................................300
ABC Codes (10.381.00) ..............................................................................................................303
Movement Classes (10.382.00) ................................................................................................305

Physical Inventory Screens 307

Purpose of Physical Inventory Screens ......................................................................................307
Physical Count Entry (10.390.00) ..............................................................................................307
Physical Count Entry, Tag Details Tab ..........................................................................309
Physical Count Entry, Count Information Tab ..............................................................311
Physical Inventory Review (10.391.00) .....................................................................................312
Physical Inventory Review, Tag Details Tab .................................................................314
Physical Inventory Review, Count Information Tab .....................................................317
Mass Update .................................................................................................................318
Physical Inventory Cost Adjustments (10.391.02) .....................................................319
Physical Cycles (10.393.00) .......................................................................................................322
Generate Inventory Tags (10.395.00) .......................................................................................323
Generate Inventory Tags, Item Selection Tab..............................................................324
Generate Inventory Tags, Other Options Tab ..............................................................326
User-Specified Items (10.395.01) ...............................................................................327
User-Specified Locations (10.395.02).........................................................................328
Reconcile Physical Inventory (10.397.00) .................................................................................330
Delete Physical Inventory Detail (10.399.00) ...........................................................................332

Process Screens 333

Purpose of Process Screens .......................................................................................................333
Release IN Batches (10.400.00) ...............................................................................................333
Reprint IN Batch Control Reports (10.410.00)..........................................................................336
Update Pending Costs / Rates (10.520.00) ..............................................................................338
Update Standard Costs from Pending (10.530.00) ..................................................................341
Update Kit Standard Cost (10.551.00)......................................................................................344
IN Integrity Check (10.990.00) ...................................................................................................346

Setup Screens 349

Purpose of Setup Screens ..........................................................................................................349
 Table of Contents vii

IN Setup (10.950.00) ................................................................................................................. 349

IN Setup, Options Tab ................................................................................................... 350
IN Setup, Physical/Cycle Tab ....................................................................................... 355
IN Setup, Item/Class Defaults Tab .............................................................................. 357
IN Setup, Inventory Accounts Tab ................................................................................ 360
IN Setup, Miscellaneous Accounts Tab ....................................................................... 362
IN Setup, Scheduling Tab ............................................................................................. 365
IN Setup, Lot/Serial Defaults Tab ................................................................................ 368
IN Setup, Site Defaults Tab .......................................................................................... 370

Reports 373
Introduction to Inventory Reports .............................................................................................. 373
In-Transit (10.070.00) ................................................................................................................ 373
Inventory Items (10.600.00) ...................................................................................................... 374
Inventory Status (10.610.00) ..................................................................................................... 375
Inventory Valuation (10.620.00) ................................................................................................ 376
Inventory Trial Balance (10.630.00) .......................................................................................... 377
Standard Cost Change Preview (10.635.00) ............................................................................ 378
Inventory Trial Bal / Valuation Variance (10.640.00) ............................................................... 379
Unit Conversions (10.650.00) .................................................................................................... 380
Inventory Substitutes (10.660.00) ............................................................................................ 380
IN Transactions (10.680.00) ...................................................................................................... 381
Account Distribution (10.690.00) .............................................................................................. 382
Product Classes (10.700.00) ..................................................................................................... 383
Attribute Definitions (10.701.00) .............................................................................................. 383
Physical Attributes (10.702.00) ................................................................................................. 384
Product Lines (10.703.00) ......................................................................................................... 385
Sales by Inventory ID (10.720.00) ............................................................................................. 385
Sales by Product Class (10.730.00) .......................................................................................... 386
PTD Detail Sales by Item (10.740.00) ....................................................................................... 386
Inventory Sites (10.750.00) ....................................................................................................... 387
Kits (10.760.00) ......................................................................................................................... 387
Bin Labels (10.770.00) .............................................................................................................. 388
Kit Component Requirements (10.780.00) .............................................................................. 389
Assembly Plans (10.790.00) ...................................................................................................... 390
IN Batch Register (10.800.00) ................................................................................................... 390
IN Edit (10.810.00) ..................................................................................................................... 391
Warehouse Bin Locations (10.820.00) ..................................................................................... 392
Reason Codes (10.830.00) ........................................................................................................ 393
Lots / Serial Numbers (10.840.00) ........................................................................................... 393
Lot / Serial History (10.841.00) ................................................................................................. 393
Physical IN Count Sheets (10.850.00) ...................................................................................... 394
Print Tags (10.852.00) ............................................................................................................... 395
Physical IN Variance Preview (10.853.00) ................................................................................ 396
Physical IN History by Item (10.854.00) .................................................................................... 397
Physical Inventory Register (10.857.00) ................................................................................... 398
Physical Count (10.858.00) ....................................................................................................... 399
Physical Cycles (10.859.00)....................................................................................................... 399
Item Cross References (10.860.00) .......................................................................................... 400
ABC Codes (10.861.00).............................................................................................................. 400
Movement Classes (10.862.00) ................................................................................................ 400
ABC Inventory Valuation (10.863.00) ........................................................................................ 401
Site Groups (SSRS) (10.870.00) ................................................................................................ 401
Project Allocated Inventory (10.880.00) ................................................................................... 402

Glossary of Terms 403

Index 409
viii Inventory
 Before You Begin 1

Before You Begin

Inventory Overview
Inventory is an important asset of most companies and a very significant financial component for
some organizations. Inventory is the generic term for the goods, including raw materials, finished
goods, and supplies that cost money, have value and are stored and used in the business. Inventory is
usually stored in one or more locations referred to as stores, warehouses, or just inventory locations.
Within one of these inventory sites, the items may be stored on shelves, in bins, tanks, etc. Tracking
the location of inventory is a key function of the Inventory system.
Inventory items can be categorized as stocked, those that are kept on hand for immediate availability,
or non-stocked, those that are ordered when needed. Stocked inventory usually consists of supplies
used on a regular basis (like pads, pens, etc.) as well as materials used to create the company‘s
product or deliver its services. A computer manufacturer would usually inventory a wide variety of
chips, cables, connectors, electronic components and the solder, paint, and packaging materials to
build and ship their product. A beer maker might store chemicals in liquid, solid, or gas form and the
necessary kegs, bottles, caps, and disposable filters to make and ready their product for market. Both
the raw material and the resulting finished goods would be inventoried.
Inventory is tracked with an identifying number or code. In the Inventory system, this code is termed
an Inventory ID. An Inventory master table is maintained with key identification about each inventory
item including a description, unit of measure, classification, cost accounting method, make vs. buy
indicator, etc. For each item that is stocked, one or more inventory site records are maintained to hold
the quantities on hand, the cost or value of the stocked items, and other information related to the
inventory in that site or warehouse.
The Inventory module then provides the functions needed to set up and maintain a perpetual finished
goods inventory. This module handles stock and non-stock items, kits of multiple items, and
configurable items. It also helps you to make ordering decisions, organize inventory production, and
track cost-of-goods-sold.
Many other modules have direct access to inventory information, including Order Management, Web
Order, Purchasing, Bill of Material, Work Order, and the Field Service Management modules. Using
these modules along with the Inventory module gives you the ability to effectively manage your
inventory items when you are making sales (Order Management, Web Order, and Field Service
Management) or purchases (Purchasing), or converting your inventory from component items to
finished goods (Bill of Material and Work Order). The Inventory module provides common pricing and
quantity tracking information across the modules. Inventory allocation across modules prevents over
allocation of quantities. Order Management adds advanced planning and promised delivery date
information.
The physical inventory capability of the Inventory module dramatically reduces the time and cost of
planning, counting, and reconciling physical inventory. With this feature, you can obtain a snapshot of
your inventory and create batches of inventory adjustments to update inventory records.
2 Inventory

User Guide Overview

This user guide provides administrators with task-oriented and reference information for the Inventory
module. Reviewing the user guide helps in making informed decisions regarding the implementation
of the Inventory module in your business.

What is Covered in the User Guide?

This user guide is organized into the following major sections:
 The ―Before You Begin‖ section provides overviews of the Inventory module and user guide,
describes the conventions used throughout this guide, and provides general guidelines for using
Microsoft Dynamics® SL and the Inventory module.
 The ―Inventory Concepts‖ section describes the primary features and major concepts you need to
know to fully take advantage of the Inventory module.
 The ―Task Guidelines‖ section provides links to step-by-step instructions on the various tasks you
can perform within Inventory. These tasks are grouped into their own major sections, which follow
the links.
 Reference information on the different types of Inventory screens and reports follows the tasks
sections.
The user guide also provides a ―Table of Contents,‖ ―Glossary of Terms,‖ and ―Index‖ for easy
reference.

Who Should Use the User Guide?

The user guide is designed for users and System Administrators who are new to the Inventory module.
The guide provides the information necessary to set up and operate a successful inventory system.
 Before You Begin 3

Inventory Module Organization

Inventory screens are grouped by function, each with a different range of numbers. The screen
groupings are as follows:
 Input — Used to enter inventory transactions such as receipts, sales, adjustments, transfers, kit
assemblies, and project inventory allocations. Inventory transactions are processed in batches
and then posted to the general ledger. Project inventory allocations do not update the general
ledger.
 Inquiries — Used to look up information about items, sites, locations, and item histories.
Information in inquiry screens can be viewed but not changed.
 Maintenance — Used to create and modify records that define inventory items, pricing, unit
conversion, product classes, site and warehouse locations, kits, cross-references, lot/serial
numbers, and other inventory information.
 Processes — Used to run various inventory processes, such as releasing transaction batches,
revising prices, updating costs or rates, and deleting or restoring inventory archive detail.
 Reports — Used to generate and print lists of inventory information to verify data and maintain
records for auditing. All report screens in the system offer a set of standard and extended report
options as described in the System Manager online help or user guide.
 Setup — Used to set up inventory process options and defaults.
4 Inventory

Using Wildcard Characters

Many fields in the Inventory module allow you to use wildcard characters when looking up information.
A wildcard is a character you can use in place of a portion of a word when performing a search.
The following characters are wildcards in Inventory.

This wildcard: Allows you to:

asterisk (*) or Search for all values starting with the characters entered before
percent sign (%) the * or %; if only the * or % is entered, all values are displayed.
question mark (?) Search for all values for an individual character.
For example:
C* matches both C300 and C0100.
C??? matches C300 only.
 Before You Begin 5

Operating Tips
The following section contains hints and tips for operating efficiently when entering data in screens.
For more detailed operating information, see the System Manager online help or user guide.

Structuring Inventory Coding

Before setting up and operating the Inventory module, you need to define coding systems for inventory
items, sites, locations, product classes, and other entities. A coding system arranges letters and/or
numbers into meaningful data record identifiers (IDs). Its purpose is to distinguish each record from all
other records in the database and to make records easy to reference and report.
Microsoft Dynamics SL features wildcard selection masking on ID fields. You can select groups of
items for reporting by using the * and ? wildcard characters to represent various characters in the IDs
you are selecting. Structuring IDs makes this capability more powerful.
Following are examples of how to structure some of the most important inventory codes. Remember
that a successful coding system, one that enhances your ability to reference and report items,
depends on consistency in application.

Inventory ID Codes
Use inventory IDs to identify specific inventory items. The ID must be unique for each item. It is
important to structure the inventory item ID coding system to provide reporting flexibility. The number
of segments defaults to 1 and the length of the segment defaults to 20. Inventory item IDs can be up
to 30 characters long and can be separated into as many as four segments, using flexkeys. See
―Setting Up Flexkey Field Information‖ under ―Setting Up Shared Information‖ in the Shared
Information online help or user guide for more on the software‘s flexkey features.
Decide on a coding system for your inventory IDs. You can set up an inventory item ID coding system
several ways, for example:
 The name of the inventory item (such as, PIPE-COPR-1/2IN for 1/2-inch copper pipe).
 A sequential number (such as, 4034265 for wire, #14, blue).
 An alphanumeric code (such as, PIPE-COPR-1/2IN-001 for item 1: 1/2 inch copper pipe).
 A product class item number combination (such as, 010002 for steel product [01], drainpipe
[0002]).
 The manufacturer‘s ID or UPC code.
 If you decide that you want to use segments in your inventory ID codes, see "Defining Code
Segments for Inventory IDs and Subaccounts" on page 43.

Product Class Codes

Use product classes to identify groups of closely related inventory items. For example, if your inventory
consists of steel, plastic, and aluminum products, you might establish the product class codes STEL,
PLST, and ALUM. Product classes are used throughout the Inventory module for reporting purposes, so
it is important to group items, being reported together, in the same or similar class. Product class IDs
can be up to six characters long. Typically, you set up product classes before entering item
information.
Decide on a coding system for your product classes. The coding system can be set up several ways, for
example:
 An abbreviated version of the product class name (such as, ALUM for aluminum products).
 A sequential number (such as, 01 for steel products).
 An alphanumeric code (such as, AL01 for aluminum products-pans and AL02 for aluminum
products-pots).
6 Inventory

Reason Codes
Use reason codes to identify why particular inventory transactions were made. For example, you might
use RETURN to indicate an item that has been returned or ADJ+ when positive adjustments are made.
Reason codes can be up to six characters long.
Decide on a coding system for your reason codes. The coding system can be set up several ways, for
example:
 A short version of the reason code description (such as, RETURN, REJECT, or SCRAP).
 A sequential number (such as, 01 for return, 02 for reject, 03 for scrap).
 An alphanumeric code (such as, RET01 for returned because it was defective, RET02 for returned
because it was the incorrect item).

Site ID Codes
Use site IDs to identify the locations of warehouses. For example, if you have warehouses in Helena,
Missoula, and Bozeman, you might identify the sites as HEL, MIS, and BOZ. Sites are used throughout
the Inventory, Purchasing, and Order Management modules to separate quantity-on-hand and
inventory value sold for each warehouse. Site IDs can be up to ten characters long.
Decide on a coding system for your site IDs. The coding system can be set up several ways, for
example:
 An abbreviated version of the city where the warehouse is located (such as, BOZ for Bozeman).
 A sequential number (such as, 01 for Helena).
 An alphanumeric code (such as, H1 for Helena, Main St. and H2 for Helena, Custer Ave.).

Warehouse Location Codes

Use warehouse location codes to identify specific locations within warehouses. For example, if a
warehouse has aisle numbers, you might identify the warehouse locations as AISLE1, AISLE2, AISLE3,
or simply 01, 02, 03, and so on. Warehouse locations can be up to ten characters long, and are used
to perform physical inventories by location.
Decide on a coding system for your warehouse locations. The coding system can be set up several
ways, for example:
 An abbreviated description of the location (such as, NORTHW for north wing).
 A sequential number (such as, 01 for aisle 1).
 An alphanumeric code (such as, A1 or AISLE1 for aisle 1, or NWA1 for north wing aisle 1).
 Before You Begin 7

Assigning Roles and Access Authority

It is helpful to define roles for all employees using the Inventory module. The purpose of defined roles
is to ensure clear audit trails and internal controls. You can also associate access authority to enforce
roles and responsibilities.

For Financial Managers

Access to the following Inventory module screens should be limited only to the financial manager or
accounting supervisor, because they control basic inventory processes and records:
 IN Setup (10.950.00)
 IN Integrity Check (10.990.00)

For Supervisors
Access to the following Inventory module screens should be limited only to supervisors and managers
who need to define or change global inventory information:
 Maintenance screens
 Physical Inventory screens
 Process screens
 Reports

For Data Entry Clerks

Employees who need to enter data into the system, such as receipts, sales, and physical counts,
should be given access to data entry screens, including:
 Receipts (10.010.00)
 Issues (10.020.00)
 Adjustments (10.030.00)
 Transfers (10.040.00)
 Kit Assembly (10.050.00)
 Project Inventory Allocation (10.080.00)
 Lot/Serial Assignment (10.070.00)
 Project Inventory (10.200.00)
 Physical Count Entry (10.390.00)

For Other Employees

Employees who simply need to look up information should be given access to inquiry screens only. The
Inventory inquiry screens are as follows:
 Inventory Item Lookup (10.210.00)
 Inventory Status Inquiry (10.220.00)
 Inventory Allocated to Projects Inquiry (10.224.00)

To Restrict Data Entry Operations to Appropriate Screens

If you are using the Purchasing module with the Inventory module, consider limiting access to Receipts
(10.010.00) so that your staff is required to complete all inventory receipt data entry using functions
in Purchasing. Similarly, if you are using the Inventory module with the Order Management module or
the Field Service Management modules, consider limiting access to Issues (10.020.00) so that it is
necessary to perform sales functions using Order Management or Field Service Management.
8 Inventory

Lot or Serial Numbered Items

If you are using lot or serial number tracked items, follow these validation rules for entry or selection of
lot or serial numbers throughout the modules:
1. Lot/serial numbers are required if the inventory item is lot or serial controlled, except in these
situations:
 Lot/serial numbers are not available for the following:
— The assignment method is When Used on the Lot/Serial Defaults tab of IN Setup
(10.950.00), and the transaction is a receiving transaction other than a return
— Non-stock items
 Lot/serial numbers are optional for the following:
— Drop shipments
— Order Management return material authorization (RMA) transactions with a disposition of
Scrap
— Order Management RMAs using the assignment method When Used on the Lot/Serial
Defaults tab of IN Setup (10.950.00)
— Return issuing transactions (for example, a Purchasing return) that use the assignment
method When Used
 These special rules govern the entry of lot/serial information in Order Management sales
orders:
— Lot/serial numbers can be entered only for order types Sales Order, Invoice, Will Call
Order, and Manual Order.
— Lot/serial numbers cannot be entered if the schedule is bound to a purchase order or if
the line is bound to a work order.
— Lot/serial numbers cannot be entered if Auto Create PO on the Shipping Information tab
of Order Management‘s Sales Orders (40.100.00) is selected for the schedule (if
the Order to Purchase module is installed).
2. The sum of the lot/serial quantity must equal the quantity specified on the line or schedule,
converted to stocking units. If these quantities are not equal, errors will occur in Order
Management sales orders and, in some cases, error messages will not be displayed.
 The quantity specified on the line or schedule is not always the same field in Order
Management Sales Orders (40.100.00). For manual orders, it is the Qty to Invoice field. In a
sales order, an invoice, or a will-call order, it is the quantity remaining to ship (Ordered less
Shipped) for the schedule.
 If lot/serial numbers are entered, there can be no quantity mismatches between the quantity
remaining to ship on the schedule and the total lot/serial quantity.
 If lot/serial numbers are required but not entered, a warning message will be displayed and
the schedule will be put on Lot/Serial Hold until lot/serial numbers are entered and the batch
is released.
 If lot/serial numbers are not required and are not entered, no message will display.
 All non-Order Management transaction entry screens that accept the input or selection of
lot/serial numbers will result in an error if the lot/serial number(s) have not been entered,
depending on the type of transaction and the Lot/Serial Assignment Method.
 Before You Begin 9

3. If there are blank lot/serial numbers (for example, quantities defaulted into the Detail grid based
on issue method, but lot/serial numbers were not specified), then:
 Shipper — A warning message appears if it is a drop shipment. It is put on hold if it is not a
drop shipment.
 All non-Order Management transaction entry screens that accept the input or selection of
lot/serial numbers will result in an error if the lot/serial number(s) have not been entered,
depending on the type of transaction and the Lot/Serial Assignment Method.
4. If the item is serial-controlled, serial numbers in the Detail grid must be unique. Otherwise, an
error message will appear.
5. In an issuing transaction (other than a return against a purchase order) for serialized items with
the When Used assignment method and for which a record already exists in the Lot/Serial Master
table, an error message will appear.
6. In an issuing transaction for an item that uses the When Received assignment method, the
lot/serial number must exist in the Lot/Serial Master table, or:
 Shipper — If Require Valid Lot/Serial Numbers at Entry is selected on the Order Management
Setup (40.950.00), Order/Shipper Entry tab, an error message will appear. Otherwise, you will
receive a warning.
 All non-Order Management transaction entry screens that accept the input or selection of
lot/serial numbers will result in an error if the lot/serial number(s) have not been entered,
depending on the type of transaction and the Lot/Serial Assignment Method.
7. In an issuing transaction for lot/serial items that use the When Received assignment method and
have quantities available that are less than or equal to zero:
 Sales order or shipper — A warning message displays.
 All non-Order Management transaction entry screens that accept the input or selection of
lot/serial numbers will result in an error if the lot/serial number(s) have not been entered,
depending on the type of transaction and the Lot/Serial Assignment Method.
8. In a return to stock transaction (for example, an RMA or return issue) for serialized items using the
When Received assignment method and with quantities available greater than zero, an error
message will appear.
9. In a return to stock transaction (for example, an RMA or a return issue) for serialized items having
the When Used assignment method and an existing Lot/Serial Master record, the Lot/Serial
Master record will be deleted so that it can be reissued.

Note: The Lot/Serial Master record does not have to exist for returns of When Received or When
Used items to take into account the possibility of the return of goods originally purchased at
another location.

10. If a Lot/Serial Master record exists and a receiving transaction other than a return is created for
an item that uses the When Received assignment method, an error will occur.
11. In an issuing transaction for a When Received item for which the lot/serial quantity available
minus transaction lot/serial quantity is greater than or equal to 0.00:
 Sales order or shipper — A warning message displays.
 All non-Order Management transaction entry screens that accept the input or selection of
lot/serial numbers will result in an error if the lot/serial number(s) have not been entered,
depending on the type of transaction and the Lot/Serial Assignment Method.
12. For serialized items, the transaction quantity must always be 1.00 or -1.00.
10 Inventory
 Concepts: How This Module Works 11

Concepts: How This Module Works

Interaction with Other Modules
The Inventory module is designed to help you buy, track, and sell products. The Inventory module itself
maintains inventory value, quantity-on-hand, pricing, and location records for all items you enter into
the system. It takes the physical inventories, cycle counts, receipts, sales, adjustments, project
allocations, and transfers that you enter and uses this information to generate reports, answer
inquiries, and update the system.

Required Modules
The General Ledger, Shared Information, and System Manager modules are all required in order to
use Inventory. These modules integrate directly with Inventory, and together they provide everything
you need to maintain accurate physical count records.

System Manager
The System Manager module provides control and record maintenance for the system, and must be
set up before you can access Inventory. It is used to install other modules, create databases, set up
companies and departments, and define templates. You can also use the System Manager to define
system security, such as which users have the authority to access or change certain distribution
screens and functions. For more information, refer to the System Manager online help or user guide.

Shared Information
The Shared Information module maintains information that is shared between modules, such as name
and address, sales tax codes, and sales and purchasing terms. The Shared Information module is also
used to define code segments for subaccounts and vendor, customer, and inventory IDs through the
flexkey feature. For example, the subaccount 03-440-AA-01-03-01 has been separated into six
segments that identify the division (03), department (440), location (AA), product group (01),
distribution channel (03), and sales region (01). For more information, refer to the Shared Information
online help or user guide.

General Ledger
The General Ledger module is the center of the Microsoft Dynamics SL accounting information system,
and must be set up before you can run Inventory. Financial transactions are posted, summarized,
processed, and reported in the General Ledger module, which maintains a complete audit trail of
business transactions. For more information, refer to the General Ledger online help or user guide.
12 Inventory

Optional Modules
Microsoft Dynamics SL offers additional modules that can be used with any core module. These
modules are Customization Manager, Currency Manager, and Application Server.
In addition, Inventory integrates optionally with many other modules, including Purchasing, Order
Management, Order to Purchase, Bill of Material, Project Controller, Flat Rate Pricing, Service
Dispatch, Service Contracts, Landed Cost, Inventory Replenishment, and Work Order, to enhance
Inventory‘s capabilities. The Order Management and Purchasing modules in particular are closely tied
to Inventory and greatly expand your ability to track sales orders and purchase orders. Communication
between modules flows in both directions: the Inventory module provides information, such as
inventory levels, to the other modules, and the other modules update inventory information, such as
on-order statistics and sales. Transactions across all modules that issue inventory will allocate, or
reserve, the inventory when the transaction is saved to prevent over-allocations of quantities. The
resulting value of quantity available, which is quantity on hand less quantities allocated to
unprocessed transactions, is tracked at the Item Site level, the Location level, and where appropriate
at the Lot/Serial Master level.

Customization Manager
The Customization Manager module allows users, MIS staff, and consultants to modify standard
Microsoft Dynamics SL screens quickly and easily. Modification capabilities range from simple
changes that the system administrator or user can make to complex customizations that are best
performed by a programmer or consultant with experience in Visual Basic ® programming and SQL
syntax.
The Customization Manager module functions are organized into separate selections on the
Customize menu. Capabilities of the Customization Manager module include:
 Implementing customizations that apply to a single user or to all users.
 Hiding fields.
 Arranging data entry screens to resemble source document formats.
 Moving fields to make room for new fields or to provide a layout that facilitates data entry and
viewing.
 Adding new data items to screens from anywhere in the SQL database, including new records and
fields added to the database. In addition to new fields, you can add standard object types such as
text boxes, drop-down lists, labels, push buttons, frames, and forms.
 Setting or changing default values.
 Creating or modifying edit masks for such items as telephone numbers and social security
numbers.
Because no two companies have identical business rules and operations, the need for customization
of any software package is inevitable. Once you identify the need for a customization, determine
whether it must apply to all or nearly all users or to a small number of users. If only a few users need
the customization, create the customization for one user, then use the Customization Import and
Export functions to copy it for other users. If many users need the customization, create two
customizations: one for the large number of users who need to use the customized version, and
another for the few users who need to use the standard version. Once you have selected the level, use
Customization Manager to create and maintain customizations that modify application screens and
the objects they contain, such as fields, field labels, and buttons.
You may meet your company‘s business needs by simply adding or rearranging objects on an
application screen, or your solution may involve adding event logic to display an informational
message associated with an object. If your business solution involves adding tables or fields to the
database, use Customization Manager to add those objects to application screens.
Use customization import and export functions to copy your customizations from one system to
another and to allow other users to access the customizations. To protect entire customized screens
or customized objects from unauthorized access, use the software‘s security functions. To more
 Concepts: How This Module Works 13

thoroughly secure data, you may also wish to secure access to certain Customization Manager
functions, such as the Customization Import and Export functions, from unauthorized access.
For more information, refer to the Customization Manager online help or user guide.

Currency Manager
Currency Manager allows you to enter transactions for multiple currencies. You can select the
appropriate currency for a screen or process and view or override the default currency rate.
Transaction amounts and account balances are stored in both the currency used for entry and the
base or domestic currency equivalent.
With Currency Manager installed, the Currency Selection and Currency View buttons become available
on the toolbar. They allow you to select the appropriate currency for a screen or process and to view or
override the default currency rate. You can also toggle the representation of monetary amounts
between the selected foreign currency and the equivalent amount in base or domestic currency.
For more information, refer to the Currency Manager online help or user guide.

Application Server
The Application Server module relieves client workstations of extreme processing loads by enabling
users to offload time-consuming processes and reports from their client workstations to separate
server PCs running Application Server.
After submitting a process or report request to the Application Server request queue, users can return
immediately to normal operations. The Application Server checks the queue for outstanding requests
and runs each process or report according to its priority in the queue just as if the process or report
had been run at a client workstation.
Providing true three-tier client/server functionality for Microsoft Dynamics SL, the Application Server
module works in all Microsoft Dynamics SL environments. Because it is easily scalable, the Application
Server module can also operate successfully in environments of all sizes. You can set up and
simultaneously operate as many Application Servers as necessary for your environment. Application
Servers can be started and stopped in any combination to match workload requirements at any given
time.
For more information, refer to the Application Server online help or user guide.

Accounts Receivable
The Accounts Receivable module maintains information needed to track customer accounts and
generate statements for receivables. The Accounts Receivable module is required if you are using
Order Management in conjunction with Inventory, and you will need to set up customer IDs in Accounts
Receivable before entering them in Order Management. Order Management then updates Accounts
Receivable with sales credited and accounts receivable accounts debited, and it updates Inventory
with cost-of-goods-sold and inventory account information.
For more information, refer to the Accounts Receivable online help or user guide.

Accounts Payable
The Accounts Payable module maintains information about money owed by tracking payments,
predicting cash requirements, and taking advantage of terms and discounts. The Accounts Payable
module is required if you are using Purchasing in conjunction with Inventory, and you will need to set
up vendor IDs in Accounts Payable before entering them in Purchasing. Purchasing then updates
Accounts Payable with debits and credits to inventory accounts, vendor payment vouchers, and
accrual goods information; and it updates Inventory when purchasing receipts are released.
For more information, refer to the Accounts Payable online help or user guide.

Purchasing
One of the key roles of the Purchasing system is to order, receive, and move into inventory any
stocked goods. Returning inventory to the supplier (vendor) is necessary to deal with defective recalled
14 Inventory

or outdated materials. Receiving increases inventory on hand while returns to a supplier reduce
inventory stocks.
Inventory receipt transactions are separated from other types of transactions (transfers, sales, and
adjustments) to simplify entry and provide control. Inventory receipts can also be entered in the
Purchasing module, if needed.
Data that you enter in Purchasing does not need to be re-entered in Inventory. Thus, if you use the
Purchasing module, you do not need to use Inventory‘s Receipts (10.010.00) to record receipt-of-
goods information. All purchases entered will automatically update inventory quantities and costs. For
more information, refer to the Purchasing online help or user guide.

Order Management
If you use Order Management in conjunction with Inventory, sales transactions are generated by Order
Management, not Inventory. These transactions are distinct from other inventory transactions because
they generate cost-of-goods-sold records. All information related to an inventory transaction is
contained in these records, including lot/serial number, warehouse location, site, price, cost, and
salesperson.
The Order Management module supports shipment and invoicing functions for all types and statuses
of orders including standard orders, blanket orders, back orders, and partial shipments. Working in
tandem with the Inventory module, the flexible sales pricing and custom item features can simplify
order entry for complex products.
Data that you enter in Order Management does not need to be re-entered in Inventory. Thus, if you use
the Order Management module, you do not need to use Inventory‘s Issues (10.020.00) to record sales
transactions. All invoices produced with Order Management automatically reduce inventory totals by
the item amounts on the associated sales orders. For more information, refer to the Order
Management online help or user guide.

Order to Purchase
An Auto PO Policy setting in Inventory‘s Inventory Items (10.250.00) and Inventory Sites (10.255.00)
supports Order to Purchase module functionality by determining whether or not a purchase order is to
be generated during order entry in Order Management‘s Sales Orders (40.100.00). The Order to
Purchase module is used in conjunction with the Inventory, Purchasing, and Order Management
modules, to improve the business process flow between the order desk and purchasing. When using
these modules together, purchase orders can be created and bound to existing sales orders
automatically. Also, sales orders can be moved through processing automatically to invoice customers
when they receives drop shipped goods.
For more information on Order to Purchase, refer to the Order Management online help or user guide.
 Concepts: How This Module Works 15

Bill of Material
The Bill of Material module provides more sophisticated product definition, costing, production, and
reporting capabilities than the standard kitting functionality within the Inventory module. Inventory and
Bill of Material share component cost-of-goods-sold information and updates to costs/rates.
Inventory‘s Update Pending Costs / Rates (10.520.00) and Update Standard Costs from Pending
(10.530.00) are similar to Bill of Material‘s Update Pending Costs/Rates (11.520.00) and Update
Standard Costs from Pending (11.530.00). Users should access the Bill of Material screens only when
the Bill of Material module is installed and configured.
For more information, refer to the Bill of Material online help or user guide.

Work Order
The Work Order module provides another level of product definition, costing, work in process,
production, and reporting capabilities beyond the features of the Bill of Material module.
For more information, refer to the Work Order online help or user guide.

Project Controller
The Project Controller module tracks financial and distribution information by project. When Project
Controller is enabled, Project and Task ID appear on certain Inventory screens. The Inventory module
then updates project records with quantity and cost information.
Throughout the modules, we have attempted to use the same logic to identify project-related
transactions. If the account charged or the account that will be used to book a financial transaction is
linked to a project account category, the project and task will be prompted and validated using
standard validation logic.
From the project interface perspective, the key table in the inventory system is the Inventory
Transaction table (INTran). Transactions are created in this table whenever an inventory activity takes
place. Some of these transactions may carry a project and these cannot flow to the project system
until finalized (released).
You can also allocate inventory directly to a project. When you allocate inventory quantities and costs
to a project, that quantity can only be consumed by the same project in Sales Orders (40.100.00), in
Shippers (40.110.00), and in Issues (10.020.00).
For more information, refer to the Project Controller online help or user guide.

Field Service Management

Field Service Management modules track financial and distribution information for field service
operations, using transactions related to service calls and service contracts. The Service Dispatch
module generates invoices that result in cost-of-goods-sold transactions in the Inventory module.
Service calls also can be used to generate purchase orders in the Purchasing module for items that
will be used on a service call or to replenish a technician‘s inventory of parts.
Inventory transaction data that you enter in Field Service Management does not need to be re-entered
in Inventory. Thus, if you use the Field Service Management modules, you do not need to use
Inventory‘s Issues (10.020.00) to record service invoice transactions. All invoices produced with
Service Dispatch automatically reduce inventory quantity on hand for positive item quantities and
increase inventory quantity on hand for negative item quantities on the associated service invoice.
For more information, refer to the Field Service Management online help or user guides for the Service
Dispatch, Service Contract, Equipment Maintenance, and Flat Rate Pricing modules.
16 Inventory

Landed Cost
The Landed Cost module gives you the ability to account for additional costs beyond the merchandise
cost incurred in purchasing inventory items beyond the merchandise cost. The Inventory and
Purchasing modules must be installed in conjunction with Landed Cost to incorporate landed cost
functionality. The Landed Cost module only applies landed costs to inventory items that are received
into inventory.
The Landed Cost module does not provide the functionality to handle the processing of estimated
landed costs in an automated fashion. You can enter estimated landed costs when the purchase order
receipt is processed. However, there is no provision in this module to automatically calculate the cost
differential when the actual landed costs are received. The cost differentials must be manually
calculated and entered into Accounts Payable‘s Voucher and Adjustment Entry (03.010.00). Because
the cost differentials must be manually calculated upon receipt of the actual landed cost invoices, you
must be diligent when entering landed cost estimates at the time of the purchase order receipt. If the
total amount of the landed cost invoice is entered in Voucher and Adjustment Entry (03.010.00) but
not the cost differential, then inventory costs will be overstated.
There are two entry points for landed costs: Purchasing‘s Receipt/Invoice Entry (04.010.00) and
Accounts Payable‘s Voucher and Adjustment Entry (03.010.00). Users may enter landed costs in one
or both of these applications depending on the timing of the receipt of the landed cost invoices. For
example, if actual landed costs are known at the time the purchase order receipt is processed, the
landed costs can be entered with the receipt. If the landed costs are not invoiced until after the goods
have been received, they can be entered in Voucher and Adjustment Entry (03.010.00). If some costs
are known at the time of the purchase order receipt and other costs are not invoiced until after the
receipt has been processed, a combination of the two entry points can be used to enter the total
landed costs. Regardless of the entry point, when landed costs are entered, the appropriate inventory
cost adjustments, accounts payable postings, and general ledger postings will be generated.
For more information, refer to the Landed Cost online help or user guide.

Inventory Replenishment
The Inventory Replenishment module aids you in deciding what inventory items need replenishing,
how much to order, and when to order them. It also aids you in managing inventory cost effectively
and in measuring performance and profitability.
Inventory Replenishment captures purchase order lead time information from the Purchasing module
and past usage information from the Inventory, Order Management, and Work Order modules. It
enables you to adjust past usage information based on the needs of your business, and to manually
enter additional information that works with its calculations to provide the most complete picture of
your current inventory situation.
 Concepts: How This Module Works 17

Inventory Interaction Diagram

Figure 1: Inventory interaction diagram

18 Inventory

Inventory Transactions
There are a number of functions within the Inventory module that can change inventory, including
Receipts, Issues, Adjustments, Transfers, Kit Assemblies, and Project Inventory Allocations. Each of
these functions creates one or more inventory activity records within the INTran table and these are
grouped into batches. When a batch is complete, it can be released. The Release IN Batches
(10.400.00) process examines the transactions, determines the cost of the transaction, creates an
offsetting record in the INTran table, updates the inventory sites and warehouse bin locations, and
books a journal in the general ledger to record the financial impact of the inventory activity. Only after
an inventory batch has been released will it be available to the project system. At that point, the
Financial Transaction Transfer (FTT) will pick up any project-related inventory activity and move these
transactions into the project database.

Receipts
Receipts are transactions that move ordered items into inventory, while supplier returns move
quantities out of inventory. Receipts are not project related, so they do not provide for project entry.
Also, this function is not needed if Purchasing is installed because it has a similar receiving capability.

Issues
The withdrawal of stocked items from inventory sites or the return of inventoried items to stock is
accompanied by a financial set of postings. The postings for an inventory withdrawal or issue reduce
the inventory asset with an offset that is usually a cost entry. If the issue is to an organization
(company subaccount) and/or a project, the cost is usually an expense like Material Expense or
Supplies. If the withdrawal is the result of picking items to fill an order, the cost posting is usually
recorded to a Cost of Sales or Cost of Goods Sold account. A return to inventory operates similarly,
with the postings reversed.
An issue permits the entry of transactions for inventory withdrawals and returns. For an inventory
issue, the user must identify the cost account that will be expensed for the issue. A default account is
available in the inventory master table for each item. If the account charged is project-linked, a valid
project and task must be provided. This information will be written onto the Issues record in the INTran
table. When the inventory batch is released, a second INTran record is created for the inventory
account but this transaction does not carry a project. The release process creates a general ledger
journal, debiting the expense account and crediting the inventory account for an issue.
If an inventory item withdrawn was incorrect or not needed or excess is being returned to inventory or
returned to project allocated inventory, a return transaction is created. The return requires an expense
account to credit, which should be the same account used on the original issue or an appropriate
contra account. If the account is project linked, the project and task must be entered. The expense
credit transaction in INTran is created during the entry. When the inventory batch is released, a
second INTran record is created for the inventory account without project. A general ledger journal pair
is created for each return, crediting the entered account and debiting the inventory account.

Adjustments
Inventory activity can be created by adjustment transactions entered to reconcile the actual inventory
on hand to the values in the computer system. Inventory can be counted in a number of ways
including cycle counting or a complete physical count. The results of counting are compared to the
values in the system and the system is altered to match the true values. In special situations,
inventory with a shelf life may become outdated. Adjustments may be used to record the scrapping of
old or outdated items. Items like food, medicines, radioactive materials, and high-tech components
may become obsolete and be removed from inventory and discarded or junked. Inventory adjustment
transactions are used to record these changes to what a company has in their inventory. Inventory
adjustments are accounting transactions that are not project specific so they do not provide for project
entry.
 Concepts: How This Module Works 19

Transfers
Transfers are transactions that move inventory between inventory locations, directly or via an in-transit
intermediary. Transfers are not project related so they do not provide for project entry.

Kit Assemblies
Kit assemblies are used to enter the stocking records of inventory kits. The effect of assembly
transactions is to transfer the quantity and cost sums of kit components from individual item records
(the raw materials) to the appropriate kit stocking record (the finished goods). Each batch of kit
assembly transactions updates the appropriate general ledger inventory account (and subaccount)
balances. Kit Assemblies are not project related so they do not provide for project entry.

Project Inventory Allocations

Project Inventory Allocations are used to allocate existing stock to projects or reverse previous project
inventory allocations (unallocated). The effect of project inventory allocations is to increase quantity
allocated to projects and decrease the quantity available for processes that use non-project allocated
inventory. The effect of project inventory unallocations is to decrease quantity allocated to projects
and increase the quantity available to processes that use project allocated inventory. No general
ledger transaction is created.

Note: You cannot issue material to a work order that is already allocated to a project. Use Availability
(21.410.00) to examine the inventory allocated to projects .
20 Inventory

Inventory Setup Considerations

When you set up the Inventory module using the setup procedures in the task guidelines, you will be
instructed to:
1. Set up basic inventory information in other modules.
2. Select general inventory process options and defaults.
3. Define specific inventory information such as items and locations.
4. Initialize inventory.
The following diagram illustrates the tasks you need to accomplish to set up the Inventory module:
Set up inventory information in the
General Ledger, System Manager,
and Shared Information modules.

Select inventory process options and

defaults using IN Setup (10.950.00).

Set up warehouse locations and/or

Set up inventory sites, product reason codes.
classes, and unit conversions. optional
optional

Set up ABC codes, movement

classes, or cycle IDs for running
cycle counts.

Set up lot or serial numbers using

Set up inventory items using Inventory Lot/Serial Number Setup
Items (10.250.00). optional (10.250.01 or 10.280.01).

optional

Define cross references, price

classes, and/or price plans.

optional

Define custom items and/or kits and

assembly plans.

Generate reports to verify that

Inventory has been set up properly.

Close Inventory for the initial period

through the General Ledger module.

Set up other modules (such as

Purchasing and Order Management)
that you want to use with Inventory.

Figure 2: Inventory setup flow

 Concepts: How This Module Works 21

Before completing the setup procedures, plan how to configure the Inventory module to best suit your
needs. To do this, consider your setup options in the following order:
1. Review the Inventory Items (10.250.00) options in ―Inventory Items (10.250.00)‖ on page 187
and decide how you want to set up your inventory items. Decisions about items will help you
decide which options you want to set up globally for your Inventory system.
2. Review the other maintenance screens in the ―Maintenance Screens‖ section and decide what
additional global information you want to use, such as warehouse locations and reason codes.
3. Decide how you want to structure global inventory information by reviewing ―Structuring Inventory
Coding‖ on page 5 in the ―Operating Tips‖ section.
Review the physical inventory process in ―Physical Inventory‖ on page 29 and ―Generate Inventory
Tags (10.395.00)‖ on page 323. Then decide how you want to run physical counts.
4. Review the IN Setup (10.950.00) options in the ―Setup Screens‖ section and decide what general
setup options and defaults are best suited to your situation given the decisions you have made.
Following are important concepts concerning inventory items, global information, and setup options.

Inventory Items
Stock vs. Non-Stock Items
The Inventory module handles information about stock items (items on hand in inventory) differently
from information about non-stock items (services and items not stocked or tracked in inventory such
as drop-ship items). For stock items, the Inventory module maintains all cost, quantity, sales,
uncosted, and cost-of-goods-sold information. Since non-stock items do not track quantities, the
Inventory module maintains only uncosted and cost-of-goods-sold information.

Item Types
An item‘s type specifies its inventory classification, such as finished good, raw material, or labor (an
item can also be a service). The software uses inventory types during cost calculations within the Bill
of Material module to determine which cost categories to increment when processing the item. For
example, if the item‘s inventory type is labor, the software adds the direct portion of the item‘s
standard cost to the direct labor cost category and the overhead portion of the standard cost to the
labor overhead cost. Certain options may automatically be configured, enabled, or disabled based on
the item type. The item type options are:
 Component Part — The item is typically used as a component part in another subassembly or
finished item (for example, circuit board chips). This type applies to stock items only.
 Labor — The item represents labor, either by an individual or a group, used for production or as a
service for sale. The quantity of a labor item typically represents hours worked. Direct standard
cost represents the cost of direct labor (for example, a machinist on the shop floor), while
overhead standard cost represents labor overhead costs (for example, a service technician
making non-billable equipment repairs). Both types of cost are added to the inventory value. This
type applies to non-stock items only.
 Finished Good — The item is typically a finished product, sold to customers in its current state.
This type generally applies to stock items, but can apply to non-stock items as well.
 Machine Overhead — The item represents the overhead costs of machinery used in production.
This can be for individual machines or groups of related machines (for example, a work center of
several drill presses or one CNC lathe). Machine Overhead typically represents hours of machine
usage time. Standard costs for a Machine Overhead item are all overhead costs; there is no direct
standard cost. This type applies to non-stock items only.
 Other Direct Costs — The item represents direct costs that do not apply to any other item type.
With this item type, the definition of item quantity depends on the item‘s use. Examples of other
direct costs are outside services such as plating (the quantity is the units of parts plated) or
equipment rental (the quantity is the number of hours for which the equipment is rented).
22 Inventory

Standard costs for an Other Direct Costs item are all direct costs; there is no overhead standard
cost. This type applies to non-stock items only.
 Other Type of Item — The item is stocked but is not part of normal inventory (for example,
maintenance parts, cleaning supplies, and small tools). This type generally applies to stock items,
but can apply to non-stock items as well.
 Raw Material — The item is typically a raw material to be fabricated as a component part in
another subassembly or finished item (for example, sheet metal to be formed into a computer
casing). This type generally applies to stock items, but can apply to non-stock items as well.
 Subassembly — The item is typically a subassembly used in another subassembly or finished item
(for example, a circuit board). This type applies to stock items only.
An item‘s inventory type does not restrict its use in other screens. For example, a Raw Material item
can be used to produce sales orders, and a Finished Good item can be used to produce purchase
orders.

Note: You can customize Microsoft Dynamics SL screens to limit item usage to only certain inventory
types.

Item Sources
An item‘s source specifies how you typically acquire the item. Source options are:
 Manufactured — The item is produced in-house.
 Outsourced — The item is produced by an outside supplier.
 Purchased — The item is purchased from an outside supplier.
An item‘s source does not restrict its use in other Microsoft Dynamics SL screens. For example, a
purchased item can have a bill of material and can be used in production screens. A manufactured
item can be used on purchase orders. This option helps handle situations in which your business
typically manufactures an item but buys during special times such as peak seasons or when item
production machinery is not operational. You can customize Microsoft Dynamics SL screens to limit
item usage to only certain source types.

Item Valuation Methods

The Inventory module supports a variety of inventory costing, or valuation methods, which can be
mixed within one site. Typically, a company uses primarily one method, but may have special inventory
items that require additional methods.
The valuation method options are:
 Average Cost — The item is valued using the weighted average cost of the quantity-on-hand; the
total cost (at the item site level) divided by the quantity on hand (at the item site level). This
number is rounded to the current Unit Decimal Precision. Average cost items receive their cost
when you enter them in Inventory‘s Receipts (10.010.00) or Purchasing‘s Receipt/Invoice Entry
(04.020.00).
The Average Cost method is used when individual items cannot be identified for cost purposes, or
it is not worth the effort to do this tracking and accounting. When items are purchased at several
different prices and moved into the same site, the value in the site is increased by the quantity
multiplied by the purchase price of each addition. When items are removed from the site for
internal use or for filling sales orders, the inventory value is reduced by the quantity multiplied by
the average price for the items in that site. For example, if one item is purchased at $9 each and
two more are purchased at $12 each, and these items are stored together in inventory, then they
have a combined value of $33 or an average cost of $11 each. When one is withdrawn from this
inventory site, the inventory value is reduced by $11, and the organization, project, or sales order
is charged this $11 average.

Note: Average Cost is recalculated for every transaction where the quantity is not equal to zero.
Frequent recalculation prevents accumulated rounding errors that would otherwise occur. Since
this number is always calculated from current quantity on hand and current cost information, our
 Concepts: How This Module Works 23

version of Average Cost is not a historical average, but rather the average cost of what remains
currently on-hand. We do not include costs for goods sold long ago, which would provide a
historical average. And when the quantity goes to zero, the last average cost is kept. Also, when
Work Order is installed, we exclude from the calculation any build-to-order cost layers in the
ItemCost table.

 FIFO — The item is valued using the first-in-first-out method. Cost information is retained using
cost layers, which is described further in the ―Inventory Costing‖ section.
The FIFO method requires tracking of inventoried items by the order of their respective receipt
dates and numbers, along with the associated cost of each addition. When items are removed
from inventory, the first, or oldest, in the site is removed first with its associated cost based on the
receipt date and number. Since inventory often is removed in quantities different from those
added, withdrawals can carry a weighted value, because the withdrawal came from different
layers, or receipts. Cost layers will be tracked for transactions associated with an originating
transaction.
 LIFO — The item is valued using the last-in-first-out method. Cost information is retained using cost
layers, which is described further in the ―Inventory Costing‖ section.
The LIFO method is very similar to FIFO in its tracking requirements. For LIFO costing, the most
recent addition to the site is the first one removed to fill any need for the item. The actual cost of
the inventory moves with the item.
 Specific Identification — The item is valued using specifically identified cost layers for items. The
specific ID carries the actual cost entered at the time of receipt. Any item that uses specific
costing carries its actual cost and is not mixed or averaged with other items that have the same
inventory ID, unless the same specific ID is used on multiple receipt transactions. This method is
often used for unique items that have a high cost, or for similar or identical items that have very
different costs. This method is also commonly used to associate specific costs with serialized or
lot-controlled items, so specific ID values may optionally be tied to lot or serial numbers. Items
using this valuation method are not allowed to have negative quantity-on-hand. Transactions
creating negative quantity-on-hand can be entered, but the batch will be given a Partially Released
status.
 Standard Cost — Each item is valued using the normal expected cost of the inventory item.
Standard Cost items receive their cost when item information is entered using Inventory Items
(10.250.00). The standard is determined outside the system and entered for each item that uses
this method. Whenever an item is moved into inventory, the inventory value is increased by the
quantity multiplied by the item‘s standard cost. If the purchased cost differs from standard, any
difference is booked to a variance account in the ledger, such as purchase price variance.
Whenever items are removed from inventory, the inventory value is reduced by the quantity
multiplied by the item‘s standard cost. The organization, project, or sales order that received the
item is charged at the item‘s standard cost. The Standard Cost valuation method is the only
costing method that can be used to automatically generate General Ledger overhead entries.
 User-Specified Cost — Valuation of the item is performed or not performed by the user. The item
receives its cost when the cost is entered in transactions such as sales orders in Issues
(10.020.00) or in Order Management‘s Sales Orders (40.100.00).
24 Inventory

Lot/Serial Number Tracking

Lot and serial numbers are used to track inventory items. You can choose to track items by either lot
or serial number, or not at all. A lot number can apply to any on hand quantity of a particular item. Lot-
numbered items typically include such items as paint, color-molded parts, and pharmaceuticals. A
serial number can apply to only one item, regardless of how many of that item you have on-hand.
Typical items tracked by serial number include computers, power tools, and cameras. If you have
10 computers in stock, each one must have a different serial number. Items such as nuts and bolts,
pencils, and paper products are generally not tracked.
The following table summarizes the use of Inventory screens and subscreens that support lot/serial
number tracking. For complete descriptions, see the reference information for each of these screens.

Screen/Subscreen Use
IN Setup (10.950.00), Used for defining the default format of lot/serial
Lot/Serial Defaults tab numbers; for example, how many digits they should
have, whether or not they should use prefix codes, and
when they will be assigned to an item — when it is
received into inventory or when it is used from inventory.
Inventory Items (10.250.00), Used to indicate whether or not a particular inventory
Lot/Serial Tracked field item should be lot/serial numbered.
Lot/Serial Number Setup A subscreen of Inventory Items (10.250.00), this screen
(10.250.01) is used to enter the information required to
automatically generate an item‘s lot/serial number. The
values in this screen are pulled from defaults set up in
Product Classes (10.280.00) or IN Setup (10.950.00)
but can be overridden.
Product Classes (10.280.00), Used to indicate whether or not a particular product
Lot/Serial Tracked field class should be lot/serial tracked.
Lot/Serial Number Setup A subscreen of Product Classes (10.280.00), this
(10.280.01) screen is used to enter the information required to
automatically generate a product class lot/serial
number. The values in this screen are pulled from
defaults set up in IN Setup (10.950.00) but can be
overridden.
Lot/Serial Assignment Accessed from any of the transaction entry screens, this
(10.070.00) screen is used to assign a specific lot/serial number
during transaction entry. Availability of the screen
depends on the transaction type and the defined
lot/serial assignment method.
Lot / Serial Numbers Used to access the lot/serial number records for a
(10.360.00) particular item, including transaction history and site
detail, and to change the item‘s status (either available
to sell or on hold).
Lot / Serial (10.229.00) Accessed from Inventory Status Inquiry (10.220.00),
this screen is used to view an item‘s lot/serial number
quantity summary or transaction history.

Stocking Units
The stocking unit is the unit of measure (carton, bundle, etc.) used to stock the item in inventory. The
stocking unit is entered in Stocking UOM on the Inventory Items (10.250.00), Information tab and
defaults to data entry screens. Typically, an item‘s purchase, stocking, and sales units are the same.
However, when these units are different, you must define unit conversions in Unit Conversions
(10.270.00) so that the software can adjust inventory balances accurately.
For example, suppose you purchase an item in 48-unit cases, stock the case units individually, and
then sell them in 12-unit cartons. In this scenario, the item needs two sets of unit conversions, one
called case, with a conversion factor of 48.00 (to convert from purchase units to stocking units in
receipt entry) and another called carton, with a conversion factor of 12.00 (to convert from stocking
 Concepts: How This Module Works 25

units to sales units during sales entry). If the item‘s stocking and sales units are the same, only one
unit conversion is necessary (to convert from purchase units to stocking/sales units.)
Unit conversions can be global (dozen = 12), product class-specific, or item-specific.

Global Inventory Information

Codes and IDs
Inventory codes and IDs are data record identifiers that you assign which are used to distinguish each
record from all other records in the database. Codes and IDs make inventory information easier to
reference and report. Following a standard coding format when you assign codes and IDs improves
efficiency. For example, the standard coding format for site IDs of East Coast warehouses might use
an E at the beginning of each ID (E01, E02, etc.). This ensures easy record retrieval, especially for
reporting. For more information about structuring inventory codes and IDs, see "Operating Tips" on
page 5.
For the Inventory module, you set up the following codes and IDs:
 Inventory Item IDs — Identify particular inventory items
 Site IDs — Identify storage facilities where inventory items are stocked
 Warehouse Locations — Identify locations within storage facilities
 Product Class IDs — Identify general product/item categories
 Unit Conversion Codes — Identify units of measure globally, by product class, or by item
 Price Class IDs — Identify particular prices within a price plan (create price classes on the Order
Management Item Price Classes (40.390.00) screen)
 Assembly Plan IDs — Identify the components and quantities required for kit assembly
 Reason Codes — Identify the reason for an inventory adjustment
 Physical Count IDs — Identify particular cycle counts or physical inventories
 Cycle IDs — Identify groups of items for cycle counting based on user-specified or random
selection
 ABC Codes — Identify groups of items for cycle counting based on item importance
 Movement Classes — Identify groups of items for cycle counting based on item movement

Item Cross References

Inventory IDs defined in the software represent your company‘s internal system records. Other entities
such as customers, manufacturers, and vendors may use different IDs for the same item. Item cross-
references are used to connect your inventory item ID to a customer, manufacturer, or vendor‘s item
ID.
For example, suppose ItemX is the internal inventory ID you have assigned to a particular item, and
that this item is purchased from a vendor whose ID for that item is ItemA. The item should be printed
on the purchase order as ItemA, but recorded as ItemX when received into inventory. If a cross-
reference has been defined, then the software can look up ItemA (the vendor‘s item ID) and cross-
reference it to ItemX (your item ID).
Cross referencing allows you to process purchase and sales orders by customer, manufacturer, or
vendor item IDs rather than by inventory item. It also allows you to reference a new item to replace an
obsolete item, or to define substitute items that can be used when an item is out of stock.

Kits
The Inventory module allows you to set up inventory kits. A kit is an inventory unit consisting of two or
more items (components), also referred to as a single-level bill of material (BOM). You can combine an
unlimited number of inventory items into kits. You can also define a kit for the components used to
produce or manufacture an item.
26 Inventory

Kitting aids inventory production, management, and ordering. Defining kits can save Order
Management and warehouse time by allowing many items to be ordered as a single kit, rather than
requiring entry of a long list of inventory IDs.
For example, you might sell baseball kits consisting of two baseballs, two bats, and four bases. You
can still sell these items individually. But when you sell a baseball kit, the Inventory module knows the
kit consists of two baseballs, two bats, and four bases and pulls these items automatically. The kit can
be a stock kit, requiring pre-assembly, or a non-stock kit (for data entry convenience). A stock kit can
have its own standard cost that is different from the sum cost of the individual kit components (items).
In this case, the cost difference is charged to an assembly variance account. When a stock kit is
assembled, assembly transactions transfer the cost and quantity of the components to the kit. The
Inventory module costs a stock kit when the kit is assembled.
A non-stock kit is a data entry convenience and does not carry quantity or cost. The Inventory module
reduces individual component (item) records when a non-stock kit is invoiced. When you sell a non-
stock kit, the Inventory module displays individual components making up the kit. The Inventory
module maintains all non-stock kit information at the component level and costs the components
when you sell a non-stock kit.
The Inventory module allows a kit to be used as a subassembly component within another kit. Any kit
item that is a stock item can be used as a component in another kit, up to five levels deep.

Site Groups
The Inventory module allows you to set up site groups and assign sites, defined in Sites (10.310.00),
to a group. A site group is used in the selection process of Update Revised Sales Prices (40.383.00) in
the Order Management module. Specifying a site group allows you to update a price plan‘s revised
sales discount price or percentage for sites that are members of the site group. This allows you to
update price plans for multiple sites at the same time instead of updating price plans for each site.

Inventory Setup Options

Default Options
The Item/Class Defaults, Inventory Accounts, Miscellaneous Accounts, Lot/Serial Defaults, and Site
Defaults tabs in IN Setup (10.950.00) are all used to set up default inventory options. Default options
are choices that will most often apply to your inventory items or processes. For example, if you select
Finished Good as the default item Type on the Item/Class Defaults tab, then when you set up items
using Inventory Items (10.250.00), Finished Good will be automatically selected as the item Type by
default. You can change the default value if it does not apply to that item, or you can leave it if the
default value is correct. Using defaults minimizes data entry time, particularly if your items tend to use
the same basic options.

Quantity-On-Hand and Available

An item‘s book quantity is its quantity-on-hand according to system records. Negative quantity-on-hand
can result when sales are entered before receipts. Depending on the valuation method you use for a
particular inventory item, the software may or may not allow quantity-on-hand to become negative. If
you want to allow negative quantity-on-hand (when possible), you should select this option in IN Setup
(10.950.00).
Quantity-on-hand is also used to calculate quantity available for sales orders. When you define
process options using IN Setup (10.950.00), you select whether or not to include items that are on
sales order, purchase order, back order, in transit, or allocated in quantity available calculations.
Quantity available calculations include items that are allocated from Inventory, Bill of Material, Work
Order, Project Controller, and the Field Service Management modules.

Warehouse Location Validation

The warehouse profiles you define in the Inventory module control the warehouses/locations you are
permitted to enter in data entry screens throughout the Inventory, Purchasing, Order Management,
and Bill of Material modules. These profiles include the types of item(s) that can be stored at inventory
 Concepts: How This Module Works 27

locations, the transactions that can be performed at these locations (receipts, sales, and assemblies),
and whether or not the items at these locations should be included in quantity available calculations.
If you want to use multiple warehouses, you should select this option on the Options tab of IN Setup
(10.950.00). Then you need to define the validation level you want to require for warehouse locations.
There are three options:
 Validate Location — A warehouse/location must be set up using Warehouse Bin Locations
(10.340.00) before the software recognizes it as a valid inventory location and uses it in
transactions.
 No Validation and Add to Table — A warehouse/location does not have to be set up before the
software recognizes it as valid and uses it in transactions. All new warehouse/locations are added
to the database automatically.
 Warning But Add to Table — A warehouse/location does not have to be set up before the software
recognizes it as valid. However, it prompts you with a message before adding new inventory
locations to the database.
Also note that the software validates locations by site ID, location ID, inventory ID, and transaction
type. Inventory ID and transaction type validation makes it easier for you to handle cases such as
these:
 Location V is a picking location where items are picked for orders, but not received.
 Location W is a reserve stock location where items are received, but not sold.
 Location X is a chemical storage tank where only item A can be stored.
 Location Y is a staging area that can store a variety of items.
 Location Z is a quality-control area where customer returns are stored; these items cannot be
sold.
28 Inventory

Inventory Processes
There are five basic processes you will use when running the Inventory module:
 Entering Transactions — Transactions include entering sales orders and receipts as well as
inventory adjustments, transfers of items from one location to another, kit assembly, and project
inventory allocations. Inventory transactions are processed in batches, which are then released
and posted to the general ledger. Project inventory allocations do not update the general ledger.
 Running Physical Inventories — Physical inventories compare actual physical quantities with your
records, and can be run annually or in cycles.
 Checking Information — You can look up information in the Inventory module by using inquiry
screens or by generating reports. Use inquiry screens to check individual item or site records, and
use reports to compare particular information for all records.
 Updating Information — The software provides process screens for updating standard costs and
sales prices, and maintenance screens for changes to other inventory information such as items,
kits, or unit conversions.
 Closing Inventory — The Inventory module should be closed at the end of standard accounting
periods and years. You should run audit trail reports before closing, and you may wish to delete
inventory detail after closing.
Entering transactions, checking information, and closing inventory are all relatively straightforward
processes, and you can find step-by-step instructions for these procedures in the following sections.
The physical inventory, costing, and pricing processes are more complex, and reviewing the following
concepts will help you to understand their corresponding procedures.
 Concepts: How This Module Works 29

Physical Inventory
Full Physical Inventory vs. Cycle Counting
The two basic methods for performing physical inventories are full physical inventories and cycle
counts. Use full physical inventories when you want to count all items or locations in a given inventory
site. Use cycle counts when you want to count only some of your inventory at a given inventory site.
Full physical inventories are generally performed annually, while cycle counts are usually performed
multiple times per year.
For cycle counts, you have the option of counting particular items or particular warehouse locations.
There are several different ways to select which items or locations to count, depending on the needs
of your company. The Inventory module offers the following cycle count selection methods:
 Cycle Count ID — Selects items or locations for counting based on a cycle ID specified by the user.
This cycle counting method is useful when you want to cycle count weekly or monthly, and want to
select when items or locations will be counted during the year.
 Items/Locations by Last Count Date — Selects all items or locations whose last count date is on or
before the specified date. This cycle counting method is useful when you have been cycle
counting weekly or monthly, and want to select all items or locations that have not been previously
counted sometime during the year.
 Items/Locations from a Previous Count — Selects all items or locations from a previous physical
inventory. This cycle counting method is useful when you want to recount items or locations
included in a previous cycle count to check whether accuracy levels have improved.
 Random Selection of Items/Locations — Selects items or locations to count randomly. This cycle
counting method is useful when you want to spot check a small number of items for record
accuracy between quarterly or semi-annual physical inventories.
 Count Frequency by Movement Class — Selects items or locations based on their movement class,
the count frequency specified for each movement class, and the date the item was last counted.
Movement classes are similar to ABC classes, but group according to sales rather than
importance, with a set percentage of items in each group. This cycle counting method is useful
when the traditional annual physical inventory has been replaced with a policy of counting the top-
moving items several times during the year, with slower-moving items being counted less
frequently and perhaps only once.
 Items or Locations Outside Movement Class Tolerances — Selects items or locations based on
their movement class, the percent accuracy from the last physical count, and the accuracy
tolerance specified for each movement class. This cycle counting method is useful as a follow up
to either the annual physical inventory or a cycle counting program based on movement count
frequency. Use it to select items whose accuracy on previous counts has been outside of
allowable tolerances to determine if procedure changes have been effective in restoring inventory
accuracy.
 Count Frequency by ABC Class — Selects items or locations based on their ABC class, the count
frequency specified for each ABC class, and the date the item was last counted. ABC classes
group items according to an importance rating (A = most important), with a set percentage of
items in each importance group. This cycle counting method is useful when the traditional annual
physical inventory has been replaced with a policy of counting the most important items (A items)
several times during the year, with less important items (such as B and C items) being counted
less frequently, and perhaps only once.
 Items or Locations Outside ABC Tolerances — Selects items or locations based on their ABC class,
the percent accuracy from the last physical count, and the accuracy tolerance specified for each
ABC class. This cycle counting method is useful as a follow-up to either the annual physical
inventory or a cycle counting program based on ABC count frequency. Use it to select items whose
accuracy on previous counts has been outside of allowable tolerances to determine if procedure
changes have been effective in restoring inventory accuracy.
 Items/Locations with Zero Quantities — Select all items or locations with quantities of zero.
30 Inventory

 Items/Locations with Quantities Less than Zero — Selects all items or locations with book quantity
less than zero. This cycle counting method is useful when you want to identify and correct obvious
inventory record errors between physical inventories.
 User-Specified List of Items/Locations — Select the number of items or locations from a list of
items or locations at the specified site. This cycle counting method is useful when you want to
spot check particular items for record accuracy between quarterly or semi-annual physical
inventories.

Tagged vs. Untagged Inventories

When you perform a physical inventory, you can use either tags or count sheets to record the
quantities. Tags are usually used when performing a full physical inventory, while count sheets are
often used for a cycle count. Count sheets and tags can also be used together if you want to leave the
tags attached to your items, but also record the physical counts on count sheets which are then used
for data entry.
If you use tagged inventories, unique tag numbers are assigned to each item/location/lot-serial
combination when you freeze inventory. The last tag number used is displayed in IN Setup
(10.950.00) and is used as the starting point for the next inventory. If you do untagged inventories, a
tag number is still assigned to each item/location/lot-serial combination in the inventory snapshot for
reference purposes; however, each physical inventory starts with tag 1.
Tags can be ordered by location, item, item description, and product class. For example, if you use
location IDs extensively to identify the bins where your items are stored, then it makes sense to
sequence tags by location because they will print in the order of your bins. Tagging items then
becomes fast and easy.

Book, Physical, and Control Quantities

The book quantity is the quantity-on-hand, less the shipped not invoiced amount according to
inventory records, whereas the physical quantity is the actual count quantity recorded at the site. The
purpose of a physical inventory or cycle count is to check the book quantity against the actual physical
count quantities. When you click Begin Processing in Generate Inventory Tags (10.395.00), the
software takes a snapshot of your book quantities.

Note: Users must not enter data transactions that affect the physical inventory count (from the
Purchasing or Order Management module for example) from the time that you generate inventory tags
until you have fully released all physical inventory adjustment batches.

The total physical quantity is the sum of the physical count quantities entered for each tag/line, and is
automatically computed by the software. After the physical counts are entered into the software, the
total physical quantity is compared to the control quantity (the sum of the book quantities) to
determine if the physical inventory is in balance. If the inventory is not in balance, you will need to
correct the error or force a balance.
 Concepts: How This Module Works 31

Inventory Costing
Cost Layers
The FIFO, LIFO, and Specific Identification costing methods keep track of item cost information in cost
layers. Cost layers are separate occurrences of acquisition costs within an item‘s record. For example,
suppose three receipts create the following cost layers within an item‘s record:

Receipt Receipt Receipt

Cost Layer Number Quantity Date Unit Value
1 11 5 2/1/02 $1.25 $6.25
2 12 5 1/2/02 $1.45 $7.25
3 13 5 12/4/01 $1.50 $7.50

 In the FIFO method, item costing associated with a sale begins with the earliest receipt by date
and number and progresses through receipts to the latest by receipt date and number until
enough item quantity is found to meet the requirements of the sale. In this case, if seven units are
sold, all units from cost layer 3 and two units from cost layer 2 are used to complete the
transaction.
 In the LIFO method, item costing associated with a sale begins with the latest receipt by date and
number and progresses through receipts to the earliest by receipt date and number until enough
item quantity is found to meet the requirements of the sale. If eight units are sold, all units from
cost layer 1 and three units from cost layer 2 are used to complete the transaction.

Cost Specific Receipt Receipt Receipt

Layer ID Quantity Date Number Unit Value
1 11 5 1/1/1900 $1.25 $6.25
2 12 5 1/1/1900 $1.45 $7.25
3 13 5 1/1/1900 $1.50 $7.50

 In the Specific Identification method, item costing associated with a sale uses cost layers based
on the specific ID entered in the order. Only one specific ID can be associated with a single
Inventory transaction. If seven units are sold, two transactions are required. The first transaction
will take five units from cost layer 1 and the second transaction will take two units from cost layer
2.
The Average costing method also keeps track of item cost information in cost layers. However, a single
average cost layer is kept per inventory site rather than separate occurrences of acquisition costs.
Oversold cost layers occur when sales transactions cause an item‘s quantity-on-hand to go negative.
The oversold cost layer uses the last cost and acts as a placeholder for cost information, allowing the
Inventory Trial Balance (10.630.00) and Inventory Valuation (10.620.00) reports to be balanced while
quantity-on-hand is negative. All sales transactions for the Average, FIFO, and LIFO valuation methods
are costed at last cost until the quantity-on-hand is positive again, at which time the oversold cost
layer is deleted. Oversold cost layers are used only if Allow Negative Quantities is selected in IN Setup
(10.950.00), and the Average, FIFO, or LIFO valuation method is used.
Any cost layer that has a layer type of Oversold contains estimated costs. It is possible to have an
oversold cost layer that contains estimated costs with a positive quantity. Oversold cost layers with
positive quantity cannot be used on a transaction that issues inventory. Oversold quantities can be
transferred to a new location, but the resulting cost layer is also flagged as Oversold until the
estimated costs have been rebooked with actual costs.

Standard, Average, and Last Costs

An item‘s standard cost is the expected cost per stocking unit that you set up in Inventory Items
(10.250.00). While you may enter a standard cost for any item, the software will not use the standard
cost to calculate the inventory value unless the valuation method is Standard Cost. The software does
use pending standard costs on non-standard cost items when calculating the pending standard cost
32 Inventory

for standard cost kits. This provides a more realistic value when the software calculates kit pending
standard costs. An item‘s standard cost can be changed at any time; however, this will affect only
subsequent inventory transactions. Whenever an item‘s standard cost is changed, an adjustment to
change the value of its on-hand inventory is required.
When using the Standard Cost valuation method, the values for Average Cost and Last Cost on the
Inventory Items (10.250.00), Cost/Price tab are filled in with the standard cost values. If the item is
not a standard cost item, the values will be the true last cost and average cost.

Direct, Fixed, and Variable Costs

Direct costs are the costs of resources going directly into acquiring or making an item. If the item is
purchased, the direct cost represents the item cost itself (direct material cost), not including any
allocated overheads. If the item is produced, direct costs can fall into several categories:
 Direct material — material going directly into acquiring or making the item. If the item is
purchased, this is the item cost itself, not including any overhead such as material handling. If the
item is produced, this is the cost of parts assembled or fabricated.
 Direct labor — labor costs going directly into making the item (this is typically the cost of employee
time to assemble the item or operate the equipment used to manufacture the item). These costs
can be obtained from routing or from bill of material components with the Labor item type.
 Other direct — other costs (typically outside processing) that go directly into making the item.
These costs can be obtained from routing or from bill of material components with the Other
Direct Costs item type.
Fixed overhead costs are costs that do not go directly into acquiring or making an item and that do not
vary with production volume. If the item is purchased, fixed overhead costs typically include only
overheads allocated based on direct material costs. If the item is produced, fixed overhead costs can
fall into several categories:
 Labor fixed overhead — costs that do not go directly into making the item and that do not vary with
production volume (for example, supervisory and administrative personnel costs, and medical
insurance premiums). These costs can be obtained from routing or from bill of material
components with the Labor item type.
 Machine fixed overhead — machinery costs that do not go directly into making the item and that
do not vary with production volume (for example, building rent allocations based on floor space
and equipment depreciation). These costs can be obtained from routing or from bill of material
components with the Machine Overhead item type.
 Material fixed overhead — material-related costs that do not go directly into acquiring or making
the item and that do not vary with production volume (for example, warehouse rent and material
handling equipment depreciation).
 Concepts: How This Module Works 33

Variable overhead costs are costs that do not go directly into acquiring or making an item but do vary
with production volume. If the item is purchased, variable overhead costs typically include only
overheads allocated based on direct material costs. If the item is produced, variable overhead costs
can fall into several categories:
 Labor variable overhead — costs that do not go directly into making the item but do vary with
production volume (for example, vacation time accrued based on hours worked and employee
uniform cleaning costs). These costs can be obtained from routing or from bill of material
components with the Labor item type.
 Machine variable overhead — machinery costs that do not go directly into making the item but do
vary with production volume (for example, utilities, lubricants, and maintenance). These costs can
be obtained from routing or from bill of material components with the Machine Overhead item
type.
 Material fixed overhead — material-related costs that do not go directly into acquiring or making
the item but do vary with production volume (for example, maintenance of material handling
equipment).

Current vs. Pending Standard Costs

The Inventory module enables you to perform what-if analyses of costing information by defining
current and pending costs.
Current standard costs are the costs used to value on-hand inventory and to cost transactions for
items using the Standard Cost valuation method. You can enter standard costs for items that use
other valuation methods, but the software does not use these costs for valuation or costing. Pending
standard costs on non-standard cost items are used when calculating the pending standard cost for
standard cost kits. This provides a more realistic value when the software calculates kit pending
standard costs. The Bill of Material module uses a component item‘s standard costs for computing the
item‘s bill of material standard cost, regardless of the item‘s valuation method.
Pending standard costs are planned changes to standard costs. These costs are not used to value on-
hand inventory or to cost inventory transactions. Their primary purpose is to establish planned
standard cost changes in advance so that you can generate bill of material reports to preview and
analyze the financial impact of these changes.

Cost Revisions
Standard costs are usually revised in preparation for a new fiscal year, although they can be changed
at any time. You should enter proposed changes to standard costs as pending standard costs first.
You can then use the Standard Cost Change Preview (10.635.00) report to review these changes and
compare current and pending costs side-by-side. Then, when you are satisfied with the changes, you
can replace the current standard costs with the pending standard costs.
If you want to revise standard costs individually, you should use Inventory Items (10.250.00) or
Inventory Sites (10.255.00). However, if you want to make similar cost changes to multiple items
(such as, adding a certain percentage to direct costs), you should use Update Pending Costs / Rates
(10.520.00) to load pending costs, and then Update Standard Costs from Pending (10.530.00) to
apply the pending standard cost changes to current costs.
If you are using a valuation method other than Standard Cost (such as, LIFO, FIFO, or Average Cost),
then costs are continually updated as new information is entered.

Costing with Project Allocated Inventory

When you allocate inventory to projects, the cost transferred to the project is determined by the
valuation method of the inventory ID using normal procedures, at the time that the inventory batch
containing the sale or the issue releases. The cost at the time of the sale or issue may not be the
same as the cost at the time that you created the commitment or the allocation.
34 Inventory

Keeping Your System Running Smoothly

Closing Inventory
You should close the Inventory module at the end of every accounting period and year. Closing
facilitates balancing inventory accounts to the appropriate accounts in the general ledger. It also
performs certain housekeeping functions such as deleting transactions not needed by the Inventory
module. Once you close Inventory (and all other modules), you close the general ledger. For more
information, see "Closing Inventory" on page 73.

Integrity Checking
The IN Integrity Check (10.990.00) process is a way of checking that inventory records are logically
consistent and referentially correct. If you discover that information has been corrupted, you can use
the integrity check process to rebuild the information from original records. For more information, see
"Validating Inventory (Integrity Checking)" on page 73.

Archiving Detail
Archiving detail removes inventory item activity and history that is no longer needed for operations, but
keeps it in an archive in case you need to rebuild inventory information later. The archived information
is then kept for several years before it is permanently deleted from the system. You set up how long
you want to retain inventory detail before archiving or deleting it in IN Setup (10.950.00). For example,
if you wanted to archive information after six periods and then delete it after one year, you would enter
6 in Periods to Retain Transactions and 1 in Years To Retain Archive History in IN Setup (10.950.00).
 Concepts: How This Module Works 35

Customer Priority Scheduling

If you are using the Order Management module, Process Manager (40.400.00) in that module
performs planning for inventory supply and demand, in a state called Customer Priority Scheduling
(CPS) On. Planning is designed to help you make the best use of available inventory from the stock on
hand plus incoming purchase orders. Process Manager (40.400.00) plans orders for shipment
according to available on-hand inventory, planned incoming supply, and the order‘s priority. Higher
priority orders get preference over lower priority orders. If orders have the same priority, then the
oldest order is given precedence (first-come, first-served).
You can turn off planning using an option in IN Setup (10.950.00), to simplify inventory allocation. The
terminology, Customer Priority Scheduling, has been designated to differentiate between the existing
Process Manager (40.400.00) planning (Customer Priority Scheduling On) and the ability to turn off
that planning functionality (Customer Priority Scheduling Off).
Inventory allocations decrease quantity available by including transactions from the following modules
that use inventory: Inventory, Bill of Material, Work Order, Purchasing (returns and project allocated
inventory), and Service Dispatch. These allocation quantities are deducted from beginning inventory
before planning for future shippers occurs. These allocations have the same functionality with either
CPS setting.

Setting Customer Priority Scheduling

Customer Priority Scheduling can be set to on or off using the Scheduling tab in IN Setup (10.950.00).
Customer Priority Scheduling On is the default option for installations where Order Management is
installed without the Work Order module. If the Order Management module is not installed, then CPS
is off. Also, if the Work Order module is installed, then CPS must be set to off before setting up and
using that module.
Once you turn CPS off in IN Setup (10.950.00) and set up the Work Order module, the option for
turning CPS on is disabled. The options for turning CPS on or off are disabled if there are any records
in the Work Order setup table (WOSetup).
The following table shows all module dependencies for CPS on and CPS off:

Order
Management Inventory Purchasing Work Order CPS Must Be
Installed Installed Installed Installed On/Off
No No Yes No Off
No Yes No No Off
No Yes No Yes Off
No Yes Yes No Off
No Yes Yes Yes Off
Yes No No No On
Yes No Yes No On
Yes Yes No No User can choose
Yes Yes No Yes Off
Yes Yes Yes No User can choose
Yes Yes Yes Yes Off

If you change the Customer Priority Scheduling option in IN Setup (10.950.00), the following message
is displayed: ―Changing Customer Priority Scheduling will cause the inventory plan to be rebuilt when
you save. This may be a lengthy process depending on the number of inventory items and sites. Other
transaction processing may be impacted. Do you want to proceed?‖ When the CPS option is changed,
supply and demand must be replanned accordingly. If CPS is changed to off, the replanning will take
place as soon as the changes are saved in IN Setup (10.950.00). The replanning activity messages
are displayed in the status bar of IN Setup (10.950.00). If CPS is changed to on, then Process
36 Inventory

Manager (40.400.00) must be started to perform the replanning after the changes are saved in IN
Setup (10.950.00).

Quantity Available Calculation

If the Customer Priority Scheduling On option is selected, then the quantity available calculation
options on the Scheduling tab in IN Setup (10.950.00) are disabled. When CPS is on, the quantity
available calculation is based on the existing plan of supply and demand and reflects what can be
shipped today by a new order that has a lower priority than all the existing orders. However, in Sales
Orders (40.100.00)) and Shippers (40.110.00) where the order priority is known, the quantity
available calculation takes the order priority into consideration.

Note: Process Manager (40.400.00) must be running for quantity Available in Inventory Status Inquiry
(10.220.00) to be updated correctly when Inventory transactions are processed.

If the Customer Priority Scheduling Off option is selected, then the quantity available calculation
options are enabled. The quantity available calculation is based on the selected supply and demand
options.
Quantity available calculations include demand from the transactions listed below. These transactions
are deducted from quantity available. They do not depend on the setting of CPS On or CPS Off. There
are no options to disable them.
 Inventory module — Issues, Adjustments, Transfers, Kit Assemblies, and Project Allocations
 Bill of Material module — Production Entry, and Component Entry
 Purchasing module — Purchase Returns, and Project Allocations
 Service Dispatch module — Service Invoices
 Work Order module — Work Order Entry, Material Requirements/Issues, Material Issues,
Transfer/Returns, and Production Completion

General Planning Concepts with CPS On

It is important to understand the definitions of the terms associated with planning for CPS On.
 Requested Date — The customer‘s requested dock date (delivery date) entered in Sales Orders
(40.100.00).
 Requested Pick Date — The date the shipper must be created so that the order can be picked and
shipped to be delivered by the customer‘s requested dock date. The planning calculations are
based on the requested pick date. The requested pick date is the customer‘s requested dock date
less the picking time less the transit time with the weekend delivery options taken into
consideration. The picking time is set on the Other tab in Order Management Setup (40.950.00).
The transit time defaults from the Ship Via, but can be overridden in Shipment Schedule
(40.106.00).
 Plan Date — The date the planning process determines the order can be shipped based on
anticipated stock availability. This is the planned shipper creation date.
 Sales Order Priority — The sales order priority is a number from 1 to 9, with 1 being the highest
priority. The sales order priority is on the Shipping Information tab in Sales Orders (40.100.00)
and defaults from Customer Maintenance (08.260.00) in Accounts Receivable. Sales orders are
planned based on the order priority and then by the priority date and priority time. The priority
date and time are initially set to the date and time the sales order was entered, but are changed
to the current date and time if the requested date is pulled in (that is, made sooner) or if the
quantity requested is increased.
 PO Lead Time — PO (purchase order) lead time is the anticipated amount of time necessary to
place a purchase order and receive an item from a vendor. The purchase order lead time is
specified in Inventory Sites (10.255.00). Sales orders are planned to ship on the lead time date
(today‘s date plus the purchase order lead time) when no supply currently exists to fill the order.
 Concepts: How This Module Works 37

All demand requested to ship at or after the purchase order lead time is planned to ship on time
because stock can be acquired in time to satisfy the demand.

Note: Purchase order lead time has been changed from weeks to days.

 Fixed Allocation Sales Orders — Fixed allocation sales orders (sales orders bound to purchase
order) for stock items are inserted into the plan on the requested pick date regardless of the
promised date on the purchase order.
With CPS on, the Order Management module constantly maintains an ordered list of planned inventory
transactions. The plan shows the current quantity on hand less allocations from other modules plus
incoming stock less planned demand. The incoming stock can come from purchase orders, RMA
returns, planned kit assemblies, and incoming warehouse transfers. Demand comes from
transactions such as sales orders, shippers, components from planned kit assemblies, and warehouse
transfers. Whenever a sales order or purchase order is changed, Process Manager (40.400.00)
automatically recalculates the shipping plan to take the changes into account. Similarly, when an
inventory usage transaction is entered in another module, Process Manager (40.400.00) recalculates
the shipping plan.

General Planning Concepts with CPS Off

These are the definitions of terms associated with planning for CPS Off.
 Requested Date — The customer‘s requested dock date (delivery date) entered in Sales Orders
(40.100.00).
 Requested Pick Date — The date the shipper must be created so that the order can be picked and
shipped to be delivered by the customer‘s requested dock date. The planning calculations are
based on the requested pick date. The requested pick date is the customer‘s requested dock date
less the picking time less the transit time with the weekend delivery options taken into
consideration. The picking time is set on the Other tab in Order Management Setup (40.950.00).
The transit time defaults from the Ship Via ID, but can be overridden in Shipment Schedule
(40.106.00).
 Plan Date — With CPS Off, the Plan Date is always the requested pick date for demand (sales
orders).
 Sales Order Priority — The sales order priority does not affect planning with CPS Off. Orders are
planned on a first-come first-served basis within the plan date, regardless of priority.
 PO Lead Time — PO lead-time is not used with CPS Off. Sales orders are always planned on the
requested pick date regardless of whether or not there is inventory available.
38 Inventory
 Task Guidelines 39

Task Guidelines
Quick Reference Task List
This list contains tasks that are commonly performed with the Inventory module. Each task is linked to
a specific page in the user guide.

How Do I Assign...?
 Access Rights to Inventory Screens — See ―Assigning Roles and Access Authority‖ on page 7.
 Default Options— See ―Inventory Setup Options‖ on page 26.
 Lot/Serial Numbers — See ―Lot/Serial Number Maintenance‖ on page 62.

How Do I Define...?
 User and Group Access Rights — See ―Defining User and Group Access Rights‖ on page 41.
 Material Types — See ―Defining Material Types‖ on page 42.
 Tax Categories — See ―Defining Tax Categories‖ on page 42.
 Code Segments for Inventory IDs and Subaccounts — See ―Defining Code Segments for Inventory
IDs and Subaccounts‖ on page 43.
 Inventory Accounts and Subaccounts — See ―Defining Inventory Accounts and Subaccounts‖ on
page 43.
 Sites — See ―Defining Sites‖ on page 46.
 Warehouse Locations — See ―Defining Warehouse Bin Locations‖ on page 47.
 Product Classes — See ―Defining Product Classes‖ on page 48.
 Unit Conversions — See ―Defining Unit Conversions‖ on page 48.
 Reason Codes — See ―Defining Reason Codes‖ on page 49.
 Inventory Items — See ―Defining Inventory Items‖ on page 49.
 Item Cross-References — See ―Defining Item Cross-References‖ on page 50.
 Kits — See ―Defining Kits‖ on page 50.
 Assembly Plans — See ―Defining Assembly Plans‖ on page 51.
 ABC Codes — See ―Defining ABC Codes‖ on page 80.
 Movement Classes — See ―Defining Movement Classes‖ on page 81.
 Cycle IDs — See ―Defining Cycle IDs‖ on page 81.

How Do I Enter...?
 Item History — See ―Entering Item History‖ on page 51.
 Receipts — See ―Entering Receipts‖ on page 55.
 Issues (Sales and Sales Returns) — See ―Entering Issues‖ on page 56.
 Adjustments to Inventory — See ―Entering Adjustments‖ on page 58.
 Transfers — See ―Entering Transfers‖ on page 59.
 Kit Assemblies — See ―Entering Kit Assemblies‖ on page 59.
 Project Inventory Allocations – See ―Entering Project Inventory Allocations‖ on page 60.
 Physical Counts — See ―Recording Physical Inventory Counts‖ on page 79.
40 Inventory

How Do I Handle...?
 Unexpected Items and Locations in a Physical Inventory — See ―Handling Unexpected Items and
Items in Unexpected Locations‖ on page 82.
 Quantity-On-Hand of Zero in a Physical Inventory — See ―Handling Items with Quantity-on-Hand of
Zero‖ on page 83.

How Do I Look Up...?

 Item Information — See ―Item Inquiries‖ on page 68.
 Inventory Status Information — See ―Status Inquiries‖ on page 70.

How Do I Print...?
 (Reprint) Batch Control Reports — See ―Reprinting Batch Control Reports‖ on page 65.
 Standard Reports — See ―Generating and Printing Reports‖ on page 72.
 Tags — See ―Printing Count Sheets and Tags‖ on page 78.
 Count Sheets — See ―Printing Count Sheets and Tags‖ on page 78.
 (Reprint) Lost or Damaged Tags — See ―Reprinting Lost or Damaged Tags‖ on page 84.

How Do I Revise...?
 Pending Standard Costs — See ―Revising Pending Costs‖ on page 66.
 Current Standard Costs — See ―Revising Standard Costs‖ on page 66.

How Do I...?
 Select Processing Options and Defaults — See ―Selecting Process Options and Defaults‖ on
page 44.
 Verify Inventory Setup — See ―Generating Reports for Verification‖ on page 53.
 Initialize Inventory — See ―Initializing Inventory‖ on page 51.
 Change Lot/Serial Numbers — See ―Changing Lot Numbers‖ on page 62.
 Update Lot/Serial Number Status — See ―Updating Lot/Serial Number Status‖ on page 63.
 Edit or Void Inventory Batches — See ―Inventory Batches‖ on page 64.
 Release Transaction Batches — See ―Releasing Inventory Batches‖ on page 64.
 Validate Inventory — See ―Validating Inventory (Integrity Checking)‖ on page 73.
 Pre-Close Inventory — See ―Pre-Closing Inventory‖ on page 73.
 Rebuild Inventory — See ―Rebuilding Inventory‖ on page 74.
 Close Inventory for the Period or Year — See ―Closing Inventory for the Period or Year‖ on page 74.
 Select Items or Locations to be Counted for a Physical Inventory — See ―Selecting Items or
Locations to Count‖ on page 77.
 Record Physical Inventory Counts — See ―Recording Physical Inventory Counts‖ on page 79.
 Update Inventory with Adjustments — See ―Updating Inventory with Adjustments‖ on page 79.
 Mark Items/Locations Never to Count — See ―Marking Items/Locations to Never Count‖ on
page 81.
 Use Tag Control in a Physical Inventory — See ―Using Tag Control‖ on page 83.
 Setting Up and Starting Inventory 41

Setting Up and Starting Inventory

Setting up Required Modules
Before you can set up the Inventory module, you must first set up certain inventory information in the
System Manager, Shared Information, and General Ledger modules. The following procedures assume
that you have already completed basic installation of Microsoft Dynamics SL.
To integrate Inventory with the Microsoft Dynamics SL system:
1. Define user access rights in the System Manager module.
2. Set up material types in the Shared Information module.
3. If you want to use tax categories, set them up in the Shared Information module.
4. If you want to use segments in your inventory IDs or subaccounts, set them up using the Shared
Information module‘s Flexkey feature.
5. Define inventory accounts (and subaccounts if necessary) in the General Ledger module.
Detailed descriptions of these steps are provided in the following procedures.

Defining User and Group Access Rights

Use access rights to define who can view, update, insert, delete, or enter information in various
Inventory screens. You will need to define users, groups, and passwords in System Manager before
setting up access rights. For more information, see the System Manager online help or user guide.
To assign users, groups, and passwords:
1. Choose Utility | Access Rights to open Access Rights Maintenance (95.270.00).
2. Select User or Group from the Type list.
3. Type the user or group ID in Group / User ID.
4. Type the company ID in Company ID or select All Companies.
5. Click Preload to access Preload Screens (95.270.01).
6. Select Inventory to view the screens for the Inventory module and click OK.
7. The software displays all the screen numbers from the Inventory module at Screen/Report
Number in Access Rights Maintenance (95.270.00).
8. Use the remaining options in this screen to specify the level of rights the user/group has in each
screen.
9. Repeat this procedure for all users/groups.
10. Click Save on the toolbar.
42 Inventory

Defining Material Types

Use material types to identify and track groups of materials that are used for similar purposes. For
example, you might group your materials into the following types: accessory, finished good, overhead,
packaging, raw material, and subassembly. For more information, refer to the Shared Information
online help or user guide.
To define material types:
1. Decide on a material type coding scheme.
2. Open the Shared Information module, and then select Material Type Maintenance. The Material
Type Maintenance (21.370.00) screen appears.
3. Enter a material type code in Material Type.
4. Provide a description of the material type in Description.
5. Select the status and a buyer.
6. Define replenishment and seasonality options.
7. Click Save on the toolbar.

Defining Tax Categories

Use tax categories to identify and track groups of inventory items that require specific tax treatment. If
you are using the Inventory module with the Order Management module and some of your inventory
items are taxed differently than others, tax categories can also ensure that the appropriate taxes are
applied to each item by default. The use of tax categories is optional. For more information, see
―Setting Up Taxes‖ in the Shared Information online help or user guide.
To define tax categories:
1. Decide on a tax category coding scheme.
2. Open the Shared Information module, and then select Tax Category Maintenance. The Tax
Category Maintenance (21.310.00) screen appears.
3. Enter your tax category IDs in Category ID.
4. Provide a description of the tax category in Description.
5. Click Save on the toolbar.
 Setting Up and Starting Inventory 43

Defining Code Segments for Inventory IDs and Subaccounts

If you want to split an ID into code segments (separated by dashes) for more precise coding, you need
to define those segments using the Shared Information module. For examples of code segments, see
the Shared Information online help or user guide.
To define code segments:
1. Open Flexkey Definition (21.320.00) in the Shared Information module to define the segments for
your code.
2. Type in a description and length for each segment.
3. Define the length; select the alignment (left or right), fill character (blanks or zeros), and edit type
(numeric, alphanumeric, etc.); indicate whether or not you want the segment validated; and define
the separator.
4. Click Save on the toolbar.
5. If you selected Validate for one or more of the code segments, open Flexkey Table Maintenance
(21.330.00) and type in the possible values for the segment.
6. Click Save on the toolbar.
7. Generate the Flexkey Definitions (21.920.00) report for a listing of the code segment structure.
8. If you selected Validate for one or more of the code segments, generate the Flexkey Tables
(21.930.00) report for a listing of the possible values for these segments.

Defining Inventory Accounts and Subaccounts

Before setting up the Inventory module, you need to set up all of your inventory accounts and
subaccounts in the General Ledger module. Refer to the General Ledger online help or user guide for
complete information on how to set up General Ledger.
To define inventory accounts and subaccounts:
1. Open General Ledger‘s Chart of Accounts Maintenance (01.260.00).
2. Enter up to a 10-digit account number and a description. Note that there are particular number
ranges for different account categories. Refer to Chart of Accounts Maintenance (01.260.00) in
the General Ledger online help or user guide for more information about the fields in this screen.
3. Fill in the rest of the fields and decide whether or not you want to do summary posting for this
account from modules outside General Ledger.
4. Click Save on the toolbar.
5. Repeat steps 2 through 4 for all inventory accounts.
6. If you want to use subaccounts, open General Ledger‘s Subaccount Maintenance (01.270.00).
7. Enter the subaccount number and a description.
8. Enter the consolidation subaccount and specify whether or not the subaccount is active. Refer to
Subaccount Maintenance (01.270.00) in the General Ledger online help or user guide for more
information about the fields in this screen.
9. Click Save on the toolbar.
10. Repeat steps 7 through 9 for all inventory subaccounts.
44 Inventory

Selecting Process Options and Defaults

The next step in setting up Inventory is to define your process options and defaults using IN Setup
(10.950.00). Choose your options carefully, as your selections will have a broad impact on the running
of physical inventory and other processes as well and are global or system wide — for all companies
and all sites. See ―IN Setup (10.950.00)‖ on page 349 for detailed field definitions and options.
You should select inventory process options carefully. See ―Inventory Setup Options‖ on page 26 for
more information.
To select inventory process options:
1. Open IN Setup (10.950.00).
2. Click the Options tab.
3. Select your basic process and retention options. Review the field descriptions in the ―Setup
Screens‖ section before making your choices.
4. Click the Scheduling tab.
5. Choose Customer Priority Scheduling On or Off, based on your requirements. See "Customer
Priority Scheduling" on page 35 to help you determine which option to choose. If you choose
Customer Priority Scheduling Off, you can select quantity options in this screen.
6. Click Save on the toolbar.
To select physical inventory/cycle count options:
See ―Physical Inventory‖ on page 29 for more information.
1. Open IN Setup (10.950.00).
2. Click the Physical/Cycle tab.
3. Select your default physical inventory/cycle counting options. Review the field descriptions in the
―Setup Screens‖ section before making your choices.
4. Click Save on the toolbar.
To select item/class defaults:
See ―Inventory Items‖ on page 21 for more information.
1. Open IN Setup (10.950.00).
2. Click the Item/Class Defaults tab.
3. Select the item/class properties that will most generally apply to your inventory items. Be
particularly careful when selecting the valuation method, as this will greatly impact inventory
costing.
4. Use the Quick Maintenance feature to define default class IDs. See ―Adding or Changing Possible
Values‖ in the Quick Reference Guide for more information.
5. Click Save on the toolbar.
 Setting Up and Starting Inventory 45

To select default accounts and subaccounts:

See ―Defining Inventory Accounts and Subaccounts‖ on page 43 for more information.
1. Open IN Setup (10.950.00).
2. Click the Inventory Accounts tab.
3. Enter the account and subaccount numbers you want to use as defaults for Inventory, COGS,
Sales, Issues, Adjustments, and In Transit.

Note: All of these accounts must first be set up in the General Ledger module. See ―Defining
Inventory Accounts and Subaccounts‖ on page 43 for more information.

4. Click the Miscellaneous Accounts tab.

5. Enter in the account and subaccount numbers you want to use as defaults for Standard Cost
Variance, Standard Cost Reval, AR Clearing, AP Clearing, Purchase Price Variance, Material
Overhead Offset, and Landed Cost Variance.

Note: These accounts are used with other modules and must first be set up in the General Ledger
module. See ―Defining Inventory Accounts and Subaccounts‖ on page 43 for more information.

6. Click Save on the toolbar.

To select lot/serial defaults:
See ―Lot/Serial Number Tracking‖ on page 24 for more information.
1. Open IN Setup (10.950.00).
2. Click the Lot/Serial Defaults tab.
3. Decide whether to use system wide lot defaults, serial defaults, or neither.

Note: Default lot and/or serial numbers can be set up by product class, using Product Classes
(10.280.00) if you have different ranges of numbers for different classes of products.

4. Select the lot or serial options that will most generally apply to your inventory items.
5. Click Save on the toolbar.
To select site defaults:
1. Open IN Setup (10.950.00).
2. Click the Site Defaults tab.
3. Enter a default ID for the site, picking bin, and put away bin.
46 Inventory

Defining Global Inventory Information

After you define your process options and defaults in IN Setup (10.950.00), you need to enter global
information such as inventory IDs, site IDs, warehouse locations, product classes, and site groups in
Inventory using maintenance screens. If your company uses the Order Management module, you
should also set up price classes on the Order Management Item Price Classes (40.390.00) screen.
Refer to ―Global Inventory Information‖ on page 25 and ―Structuring Inventory Coding‖ on page 5, as
well as the Order Management help or user guide for more information.
You should set up global inventory information in the following order:
1. (Optional) Price class IDs using Order Management Item Price Classes (40.390.00).
2. Site IDs using Sites (10.310.00).
3. Warehouse locations using Warehouse Bin Locations (10.340.00).
4. Product classes using Product Classes (10.280.00).
5. Units of measure and unit conversions using Unit Conversions (10.270.00).
6. Reason codes using Reason Codes (10.350.00).
7. Inventory item IDs using Inventory Items (10.250.00).
8. Cross-references and substitutions using Item Cross References (10.380.00).
9. Inventory sites using Inventory Sites (10.255.00).
10. Kits using Kits (10.320.00).
11. Kit assembly plans using Assembly Plans (10.330.00).
12. Site groups using Site Group (10.315.00).
Refer to the appropriate entry in the ―Maintenance Screens‖ section for information about these
screens, including their functions and field definitions. Following are more detailed procedures for the
steps listed above.

Defining Sites
Use site IDs to identify the particular warehouses where inventory is kept. Decide on a site ID coding
system (see ―Global Inventory Information‖ on page 25 and ―Site ID Codes‖ on page 6), and use the
following procedures to enter your site IDs into Inventory. See ―Sites (10.310.00)‖ on page 273 and
―Inventory Sites (10.255.00)‖ on page 226 for complete descriptions of the fields used to define sites
in each screen.
To define sites in Sites (10.310.00):
1. Open Sites (10.310.00) and on the Information tab, enter a site ID.
2. Provide location and contact information for the site ID in the other fields.
3. Also on this tab, you can indicate if you want a shipper to be created regardless of inventory
availability and, when appropriate, if you want the item to appear in web-enabled functions.
4. Click the OM Accounts tab and enter the various accounts/subaccounts that will be increased by
sales of items in the site.
5. If you are using the Inventory Replenishment module, click the Replenishment tab to define
inventory replenishment parameters for the site.
6. Click the Seasonality tab to define seasonal dates associated with the site.
7. Click Save on the toolbar.
8. Repeat this procedure to define your other site IDs.
 Setting Up and Starting Inventory 47

To define sites in Inventory Sites (10.255.00):

When you need to define specific item/site combinations, for example when an item has a higher cost
at one location than another:
1. Open Inventory Sites (10.255.00) and in the screen header, enter an Inventory ID.
2. In Site ID, enter the site that you want to define for this inventory item.
3. On the Information tab, provide product manager information, default units of measure, and
default picking, put away, repair, and vendor bins for the item/site.
4. On the Physical Inventory tab, you can make the item available for physical inventories by
choosing Available in Count Status.
5. On the IN Accounts tab, provide the appropriate account information.
6. On the Costs tab, enter any pending standard cost changes. When a new site record is created in
Inventory Sites (10.255.00), costs can be entered in the current standard cost fields.
7. Use the Replenishment Parameters and Replenishment Values tabs to define inventory
replenishment parameters for the site.
8. Click Save on the toolbar.
9. Repeat this procedure to define additional item/site IDs.

Defining Warehouse Bin Locations

Use Warehouse Bin Locations (10.340.00) to define the profiles of all locations within warehouses
where you store inventory items. These profiles include the types of item(s) that can be stored at
inventory locations, the transactions that can be performed at these locations, and whether or not the
items at these locations should be included in quantity available calculations. This screen is also used
to specify cycle count information if you want to count by location. See ―Physical Inventory‖ on page 29
for more information.
The warehouse bin locations you define in Warehouse Bin Locations (10.340.00) are used in
Inventory Items (10.250.00), Product Classes (10.280.00), Inventory Sites (10.255.000), and Sites
(10.310.00) as separate default picking, put away, repair, and vendor bins.
Decide on a warehouse location coding system (see ―Warehouse Location Codes‖ on page 6), and
then use the following procedure to enter all of your warehouse locations into Inventory. See
―Warehouse Bin Locations (10.340.00)‖ on page 291 for complete descriptions of the fields used to
define warehouse locations.
To define warehouse bin locations:
1. Open Warehouse Bin Locations (10.340.00) and enter a warehouse bin location code in
Warehouse Bin Location (Detail) and a description of the code in Description.
2. Use the other fields to provide specific information about the warehouse bin location.
3. If you are using the inventory validation feature (see ―Warehouse Location Validation‖ on
page 26), you will need to do one of the following:
 Return to this screen later and enter the Primary Inventory ID after you have completed the
―Entering Inventory Items‖ procedure.
 Use the Quick Maintenance feature to enter the Primary Inventory ID now. See ―Adding or
Changing Possible Values‖ in the Quick Reference Guide for more information.
4. Click Save on the toolbar.
5. Repeat this procedure to define your other warehouse location codes.
48 Inventory

Defining Product Classes

Use product classes to identify groups of closely related inventory items. Decide on a product class
coding system (see ―Global Inventory Information‖ on page 25 and ―Product Class Codes‖ on page 5),
and use the following procedure to enter all of your product class IDs into Inventory. See ―Product
Classes (10.280.00)‖ on page 255 for complete descriptions of the fields used to define product
classes.
To define product classes:
1. Open Product Classes (10.280.00) and enter a product class ID in Class ID.
2. Provide a description of the product class in Description.
3. Enter the item defaults, general ledger accounts, rate defaults, and lot/serial setup information
that generally apply to most of the items in the product class.
4. Click Save on the toolbar.
5. Repeat this procedure to define your other product classes.

Defining Unit Conversions

Use unit conversions to define all stocking units of measure (UOM) used in the system and unit
conversion information for inventory items with purchase or sales units differing from their stocking
unit. For example, an item might be purchased in 48-unit cases and sold in 12-unit cartons. Note that
you must establish unit conversions if items have different purchase, stocking, or sales units.
Stocking UOMs and global or product-class-specific conversions should be set up before inventory
items. Item-specific conversions should be defined after inventory items have been set up.
To define unit conversions:
See ―Unit Conversions (10.270.00)‖ on page 252 for complete descriptions of the fields used to
define unit conversions.
1. Open Unit Conversions (10.270.00) and select the scope of the UOM usage or unit conversion
(Global, Product Class, or Item-Specific) from the Type list. You may need to scroll to a blank line if
demo data appears in the screen.
2. If you are defining a product class UOM or conversion, enter the class ID. If you are entering an
item-specific UOM or conversion, enter the inventory ID of the item.
3. Enter the type of unit you are converting from (such as, case) in Alternate Unit of Measure, and
the type of unit you are converting to (such as, carton) in Stock Unit of Measure.
4. Select the mathematical operation and conversion factor needed to perform the conversion. (For
example, to convert from 48-unit cases to 12-unit cartons, you divide by 4.) A sample calculation
for the conversion is shown at the bottom of the screen.
5. Click Save on the toolbar.
6. Repeat this procedure for all of your unit conversions.
 Setting Up and Starting Inventory 49

Defining Reason Codes

Use reason codes to provide reasons why inventory transactions are being made. Use of reason codes
is optional. If you want to use them, decide on a coding system (see ―Reason Codes‖ on page 6) and
use the following procedure to enter all of your reason codes into Inventory. See ―Reason Codes
(10.350.00)‖ on page 295 for complete descriptions of the fields used to define reason codes.
To define reason codes:
1. Open Reason Codes (10.350.00) and enter reason code in Reason Code. You may need to scroll
to a blank line if demo data appears in the screen.
2. Provide a description of the reason code in Description.
3. Specify the default account and subaccount that will be adjusted for the identified reason code.
4. Click Save on the toolbar.
5. Repeat this procedure to define your other reason codes.

Defining Inventory Items

Use inventory item IDs to define the profiles of all inventory items in the database. You must enter an
item‘s information before you can enter and process transactions (receipts, sales, transfers, etc.) for
the item. See ―Inventory Setup Considerations‖ on page 20 for more information.
Decide on an inventory ID coding system (see ―Inventory ID Codes‖ on page 5). Once you set up an
item‘s information, you cannot change its inventory ID. The only way to change the ID is to delete and
re-enter the item, using a new ID. Use the following procedure to enter all of your inventory items into
Inventory. See ―Inventory Items (10.250.00)‖ on page 187 for complete descriptions of the fields used
to define inventory items.
To define inventory items:
1. Open Inventory Items (10.250.00) and enter an inventory ID in Inventory ID. Provide a description
of the inventory item in Description.
2. Click the Information tab to define basic information about the item such as class ID, valuation
method, and stocking unit.
3. If you want to be able to assign a lot or serial number to the item during transactions, click
Lot/Serial Setup on the Information tab and fill in the defaults for either lot or serial numbers. See
―Lot/Serial Number Setup (10.250.01)‖ on page 223 for more information.
4. Click the Cost/Price tab to define an item‘s cost and price information.
5. Click the GL Accounts tab to specify the general ledger accounts and subaccounts associated with
the item.
6. If you are using the Order Management module, click the OM Accounts tab to specify Order
Management accounts and subaccounts associated with the item.
7. Click the Replenishments tab to specify an item‘s reorder information if the Inventory
Replenishment module has been installed.
8. Click the Physical Cycle tab to specify an item‘s physical inventory or cycle count information.
9. Click the Shipping tab to define shipping specifications.
10. Click the Size/Style/Color tab to specify an item‘s size, style, color, and other attributes.
11. Click the Item Defaults tab to define the item‘s default site ID, picking bin, put away bin, and
default task ID.
12. Click the Seasonality tab to specify applicable seasonal requirements.
13. Click Save on the toolbar.
14. Click Item XRef to enter any cross-references for the item. See ―Item Cross References‖ on page
25, ―Defining Item Cross-References‖ on page 50, and ―Item Cross References (10.380.00)‖ on
page 300 for more information.
50 Inventory

15. Click Item History to enter an item‘s history of activity, such as quantities sold and sales amounts.
See ―Inventory Item History (10.251.00)‖ on page 185 for more information.
16. Click Site Detail to define an item‘s cost and quantity information by inventory storage site. See
―Inventory Sites (10.255.00)‖ on page 226 for more information.
17. Repeat this procedure to define your other inventory IDs.

Defining Item Cross-References

Use item cross-references to associate your inventory IDs with corresponding IDs used by other
companies such as vendors, customers, and manufacturers. Also use item cross-references to identify
substitutes for inventory items.
To define item cross-references:
Refer to ―Item Cross References (10.380.00)‖ on page 300 for complete descriptions of the fields
used to define item cross-references.
1. Open Item Cross References (10.380.00).
2. Enter the Inventory ID of the item you want to cross-reference.
3. Select the Type of cross-reference being created. Note that you can use the Substitute type to
define item substitutes.
4. Enter the Entity ID, Alternate ID, and Alternate Description.
5. Click Save on the toolbar.
6. Repeat this procedure for all of your item cross-references.

Defining Kits
A kit is a set of inventory items grouped together to form a separate multi-component inventory item;
for example, a pump kit comprised of gaskets, rings, and valves. See ―Kits‖ on page 25 for more
information. Kit stocking records are based on criteria established in Kits (10.320.00). See ―Kits
(10.320.00)‖ on page 286 for complete descriptions of the fields used to define kits.
To define kits:
1. Define an inventory ID for the kit using Inventory Items (10.250.00). Set up a default inventory
account (subaccount) for each kit type and its related kit components.
2. If the kit includes labor and overhead, set up these items as non-stock inventory items using
Inventory Items (10.250.00).
3. Open Kits (10.320.00).
4. Define kit criteria by identifying the kit components (items making up the kit) and specifying the
quantity of each component required by the kit. Also set up a variance account (and subaccount)
if the item valuation method is standard cost, and decide whether to explode the level of detail on
sales orders.
5. Click Save on the toolbar.
6. Repeat steps 1 through 5 for all of your kits.
7. After establishing a kit‘s criteria, use Assembly Plans (10.330.00) to define and list the
components (subassemblies and purchased items) required to produce the inventory kits in a kit
assembly plan. Refer to ―Defining Assembly Plans‖ in this topic.
8. To review kit assembly plan information, use Assembly Plans (10.330.00) or generate the
Assembly Plans (10.790.00) report.
9. To compute the net quantity required for each kit component for all active kit assemblies,
generate the Kit Component Requirements (10.780.00) report.
 Setting Up and Starting Inventory 51

Defining Assembly Plans

Use assembly plans to identify the inventory kits and the quantities of each kit to be assembled when
you implement the plan. You do not need to define assembly plan IDs if you are not using kits. If you
want to use kits, then decide on a coding system for assembly plan IDs (see ―Structuring Inventory
Coding‖ on page 5) and use the following procedure to define assembly plans. See ―Assembly Plans
(10.330.00)‖ on page 289 for complete descriptions of the fields used to define assembly plans. You
do not have to define Assembly Plans to use kits.
To define assembly plans:
1. Open Assembly Plans (10.330.00).
2. Enter the assembly plan ID in Plan ID.
3. Provide a description of the assembly plan in Description.
4. Select the status of the plan (Active or Inactive).
5. In Inventory ID, type the inventory kit ID used in the assembly plan you are defining.
6. In Quantity, type in the quantity of kits to be assembled.
7. Click Save on the toolbar.
8. Repeat steps 2 through 7 to define your other assembly plan IDs.

Defining Site Groups

Use site groups to identify collections of sites that are used in Update Revised Sales Prices
(40.383.00) of the Order Management module. You do not need to define site groups if you are not
using the Order Management module. If you want to use site groups, decide on a coding system for
site group IDs and use the following procedure to define site groups. See ―Site Group (10.315.00)‖ on
page 284 for complete descriptions of the fields used to define site groups.
To define site groups:
1. Open Site Group (10.315.00).
2. Enter the site group ID in Site Group ID.
3. Provide a description of the site group in Description.
4. In Site ID, type each site ID that is a member of the site group.
5. Click Save on the toolbar.
6. Repeat steps 2 through 5 to define your other site group IDs.

Initializing Inventory
The following procedures explain how to initialize the Inventory module so you can begin using it as
part of your Microsoft Dynamics SL accounting information system.

Entering Item History

The software must be operating in Initialize mode for this procedure to work properly. See the System
Manager online help or user guide for details. Item History values entered in this manner do not have
the normal transaction history data necessary to rebuild the values entered. Running Rebuild Item
History from within IN Integrity Check (10.990.00) will recalculate these values based only on the
historic detail transactions within the software. To maintain these values the item, site, or fiscal year
must be excluded from the rebuild process. See ―IN Integrity Check (10.990.00)‖ on page 346 for
more information on rebuilding item history.
To enter inventory item activity for past fiscal periods:
1. Choose Initialize Mode from the Option menu.
2. Open Inventory Item History (10.251.00).
3. Enter the Inventory ID of the item for which you are entering history.
52 Inventory

4. Enter the Quantity Sold, Sales Amount, COGS, Quantity Issued, and Cost Issued for past fiscal
periods. The software automatically calculates year-to-date totals.
5. Click Save on the toolbar.
6. Repeat steps 3 through 5 to enter history for other items.
7. Close Inventory Item History (10.251.00).
8. Choose Initialize Mode from the Option menu to deactivate Initialize mode.
 Setting Up and Starting Inventory 53

Generating Reports for Verification

To verify the accuracy of the information you entered when setting up Inventory:
1. Generate and review the Inventory Items (10.600.00) report. This report lists all of the items in
Inventory, and contains much of the information defined in Inventory Items (10.250.00).
2. Generate and review the Inventory Status (10.610.00) report. This report lists the status
(quantities on purchase order, quantities on sales order, etc.) of inventory items from selected
product classes.
3. Generate and review the Inventory Valuation (10.620.00) report. This report lists inventory IDs,
current storage locations, associated monetary values, and cost layer information for stock items.
4. Generate and review the Inventory Trial Balance (10.630.00) report. This report provides an item-
by-item listing of all transactions affecting the current accounting period‘s stock inventory item
quantities and cost amounts.
5. Generate and review the Unit Conversions (10.650.00) report. This report lists valid inventory item
units of measure, as well as conversion factors.
6. Generate and review the Inventory Substitutes (10.660.00) report. This report lists all valid item
substitutions.
7. Generate and review the Product Classes (10.700.00) report. This report lists all valid product
classes.
8. Generate and review the Inventory Sites (10.750.00) report. This report lists all inventory sites
where items are stored.
9. Generate and review the Kits (10.760.00) report. This report lists kits, their components, and all
other related kit details.
10. Generate and review the Assembly Plans (10.790.00) report. This report lists all valid assembly
plans.
11. Generate and review the Reason Codes (10.830.00) report. This report lists all valid reason
codes.
12. Generate and review the Item Cross References (10.860.00) report. This report lists all valid item
cross-references.
13. Generate the Trial Balance (01.610.00) report in the General Ledger module and compare it to
the Inventory Valuation (10.620.00) report from step 3. If the figures match, you are ready to
close the Inventory module for the period.

Closing Inventory for the Initial Period

To close inventory for the initial period through the general ledger:
1. Sign off Microsoft Dynamics SL and back up the database and transaction log file. Refer to the
System Manager online help or user guide for more information.
2. If using the Financial Statement Translation module and the Bi-Monetary Inventory Tracking
feature in the Inventory module, run Historical Rate Update Process (25.540.00) for each of the
translation definitions affected.
3. Sign on to Microsoft Dynamics SL and open Closing (01.560.00) in General Ledger.
4. Verify the current fiscal period.
5. Select Period under Closing Type.
6. Click Begin Processing.
7. When the process is complete, close Closing (01.560.00).
54 Inventory

Setting up Optional Modules

If you want to use other Microsoft Dynamics SL modules with Inventory, you should complete the
Inventory setup process, and then see the appropriate online help or user guide for specific setup
information concerning the other modules. You should always close Inventory for the period before
installing and setting up other modules. See ―Closing Inventory for the Period or Year‖ on page 74 for
more information. And, for more information about how the Inventory module can be used with other
modules, see ―Interaction with Other Modules‖ on page 11.
 Running and Maintaining Inventory 55

Running and Maintaining Inventory

Introduction to Running and Maintaining Inventory
The following procedures provide steps for processing batch transactions, revising costs and prices,
making inquiries, generating reports, and maintaining your system. These processes are independent
and do not need to be carried out in any particular order.

Processing Transactions
For the following procedures, you access data entry screens to enter inventory transactions (including
entry of receipts, sales, adjustments, transfers, and kits), that are then released in batches. The entry
procedures should be completed as needed and do not need to be carried out in a particular order,
although, it is wise to enter receipts before sales to avoid negative quantity-on-hand. Issue
transactions (those that decrease quantity on hand) and project inventory allocations reserve the item
quantities, which decreases quantity available until the transactions are released. The releasing
inventory batches procedure should be completed after entry of batch transactions. Once a batch is
released, use Adjustments (10.030.00) to revise item quantities or costs.

Entering Receipts
This procedure explains how to enter receipts into Inventory. Use this procedure only if you are not
using the Purchasing module.
If you are using the LIFO or FIFO valuation methods, you must enter the inventory receipt date. For
more information about entry options for different methods, see ―Item Valuation Methods‖ on
page 22.
To enter inventory receipts:
Refer to ―Receipts (10.010.00)‖ on page 85 for more information.
1. Inspect the items in the inventory shipment for visual defects, count the quantities, compare the
actual items received with quantities listed on the packing slip and purchase order, and note any
differences.
2. Open Receipts (10.010.00) and enter the inventory receipt information.
3. If you are using lot/serial numbers to track transactions, the software will assign lot or serial
numbers automatically if you have entered lot or serial number defaults using the Lot/Serial
Setup button on Inventory Items (10.250.00) or Product Classes (10.280.00), or in IN Setup
(10.950.00). If defaults were not set up, click Lot/Serial in Receipts (10.010.00) to access
Lot/Serial Assignment (10.070.00) and assign the lot/serial numbers.
4. Click Save on the toolbar.
5. Run the Release IN Batches (10.400.00) process to release the transaction batches for posting to
the general ledger. See ―Inventory Batches‖ on page 64 for more information. This step increases
quantity on hand for the inventory items. If Batch Handling is set to Release Now, Receipts
(10.010.00) will automatically call Release IN Batches (10.400.00).
6. Process vendor invoices using the Accounts Payable module. See the Accounts Payable online
help or user guide for more information.
56 Inventory

Entering Issues
Use the following procedure to enter issues such as sales and sales returns. Refer to ―Issues
(10.020.00)‖ on page 91 for more information.
Use this procedure only if you are not using the Order Management module. If you use Order
Management to enter and process sales orders, then inventory, accounts receivable, and general
ledger records will be updated automatically when the batch created by the Order Management Sales
Journal has been processed by Release IN Batches (10.400.00). It is also possible to process an
Order Management batch from within Issues (10.020.00) by setting Batch Handling to Release Now.
To enter issues:
1. Use the sales orders to pick the items required to fill the orders. Mark quantities shipped on the
sales orders.
2. Package and ship the orders, including a copy of the sales order as a packing slip.
3. Write each order‘s date shipped and any freight charges on the sales order form.
4. Open Issues (10.020.00) and enter the sales order information.
5. Under Type, select one of the following options:
a) Invoice for a sales order
b) Credit Memo for a sales return
c) Return for a non-sales return
d) Issue for non-sales issues from Inventory.

Note: If the accounts affected are set up as project accounts for the Project Controller module,
you will be required to specify a valid project ID and task. The project ID and task may default from
project allocated inventory.

e) Debit Memos—behave just like invoices (deducting from inventory and affecting the same
general ledger accounts).
f) Return to Project Allocated – for a non-sales return that also allocates the quantity to a
project

Note: The Type options for Invoice, Debit Memo, and Credit Memo are available only if you are not
using the Order Management module.

6. If you want to enter lot or serial numbers for the transaction, click Lot/Serial to access Lot/Serial
Assignment (10.070.00) during transaction entry. If you do not manually enter the lot or serial
number, the system will use the next available number. Invoice or Issue selects the number based
on the item‘s valuation method and a Credit Memo or Return assigns the next unused number if
you do not manually enter the number from the returned item.
7. Click Save on the toolbar. This step will allocate inventory for the transaction, decreasing quantity
available.
8. Run the Release IN Batches (10.400.00) process to release the transaction batches for posting to
the general ledger. See ―Releasing Inventory Batches‖ on page 64 for more information. This step
decreases quantity on hand for the inventory items. If Batch Handling is set to Release Now,
Issues (10.020.00) will automatically call Release IN Batches (10.400.00).
 Running and Maintaining Inventory 57

To issue project allocated inventory to a project:

1. Use the sales orders to pick the items required to fill the orders. Mark quantities shipped on the
sales orders.
2. Package and ship the orders, including a copy of the sales order as a packing slip.
3. Write each order‘s date shipped and any freight charges on the sales order form.
4. Open Issues (10.020.00) and enter the sales order information.
5. Under Handling, select Release Later.
6. Under Type, select Issue.
7. Specify the inventory item in Inventory ID, the site ID in Site ID, and the warehouse bin location in
Warehouse Bin Location
8. Click Project Inventory to launch Project Inventory (10.200.00), and then click Select to select the
project inventory allocation that you want to consume and return to Issues (10.020.00).

Note: the Project ID and Task ID will be populated automatically.

9. In Quantity, specify the quantity that you want to issue to the project.

Note: The quantity that you specify cannot be larger than the quantity originally allocated. If you
have to issue additional project allocated inventory, you must create a separate issue line. If you
have to issue non-project allocated inventory, you must create a separate issue line.

10. If you want to enter lot or serial numbers for the transaction, click Lot/Serial to launch Lot/Serial
Assignment (10.070.00) during transaction entry. You can only use the lot numbers or serial
numbers that you previously allocated to project.
11. Click Save on the toolbar. This step will not allocate inventory for the transaction, as the quantity
was allocated during the original project inventory allocation..
12. Run the Release IN Batches (10.400.00) process to release the transaction batches for posting to
the general ledger. See ―Releasing Inventory Batches‖ on page 64 for more information. This step
decreases quantity on hand for the inventory items. If Batch Handling is set to Release Now,
Issues (10.020.00) will automatically call Release IN Batches (10.400.00).
To return an inventory item to stock and allocate the inventory to a project:
1. Use the sales orders to track the items. Mark quantities returned on the sales orders.
2. Write each order‘s date returned and any charges on the sales order form.
3. Open Issues (10.020.00) and enter the sales order information.
4. Under Handling, select Release Later.
5. Under Type, select Return to Project Allocated.
6. Specify the inventory item in Inventory ID, the site ID in Site ID, and the warehouse bin location in
Warehouse Bin Location
7. In Quantity, specify the quantity that you want to return to inventory and allocate to a project.
8. If you want to enter lot or serial numbers for the transaction, click Lot/Serial to launch Lot/Serial
Assignment (10.070.00) during transaction entry.
9. In Project ID, specify the project ID for the allocation. You can make this the same project as the
original or choose a different project.
10. In Task ID, specify the task ID for the allocation. You can make this the same task as the original
or choose a different task.
11. Click Save on the toolbar. This step will not allocate inventory for the transaction, as the quantity
was allocated during the original project inventory allocation..
12. Run the Release IN Batches (10.400.00) process to release the transaction batches for posting to
the general ledger. See ―Releasing Inventory Batches‖ on page 64 for more information. This step
decreases quantity on hand for the inventory items. If Batch Handling is set to Release Now,
Issues (10.020.00) will automatically call Release IN Batches (10.400.00).
58 Inventory

Entering Adjustments
Use the following procedure to enter inventory adjustments. Refer to ―Adjustments (10.030.00)‖ on
page 99 for more information. This procedure explains how to adjust the quantity-on-hand or the total
cost amount of an inventory item. Complete this procedure to adjust physical inventory or for any other
inventory revaluation. Adjustments to costs or quantities for layered cost methods such as FIFO and
LIFO require entry of receipt dates and numbers to adjust items.
To enter adjustments:
1. Generate the Inventory Valuation (10.620.00) report if you are going to adjust costs for layered
cost items.
2. Open Adjustments (10.030.00) and enter the inventory adjustments (Handling set to Release
Later or Hold).
3. To enter lot/serial numbers for the transaction, click Lot/Serial in Adjustments (10.030.00) to
access Lot/Serial Assignment (10.070.00) and assign the lot/serial numbers. Otherwise, the
software will assign lot/serial numbers using the next available lot/serial number for positive
adjustments to items that are configured with the When Received into Inventory assignment
method. The software will assign lot/serial numbers for negative adjustments using the next
available lot/serial number based on the item‘s issue method.
4. Click Save on the toolbar. This step will allocate inventory for downward quantity adjustments on
the transaction, decreasing quantity available.
5. Run the Release IN Batches (10.400.00) process to release batch transactions for posting to the
general ledger. See ―Inventory Batches‖ on page 64 for more information. This step decreases
quantity on hand for the inventory items. If Batch Handling is set to Release Now, Adjustments
(10.030.00) will automatically call Release IN Batches (10.400.00).
6. Regenerate the Inventory Valuation (10.620.00) report to determine if the layered costs adjusted
correctly.

Note: You cannot adjust cost that has been allocated to a project while the quantity is allocated to the
project. Use Project Inventory Allocation (10.080.00) to unallocate the quantity, use Adjustments
(10.030.00) to adjust the cost, and then use Project Inventory Allocation (10.080.00) to allocate the
quantity to a project.
 Running and Maintaining Inventory 59

Entering Transfers
Use the following procedure to enter inventory transfers. Refer to ―Transfers (10.040.00)‖ on
page 106 for more information. This process transfers inventory from one warehouse location to
another or from one lot/serial number to another. Transferring from one lot/serial number to another
can only occur on two-step transfers.
To enter transfers:
1. Determine the inventory to be transferred. Generate the Inventory Valuation (10.620.00) report to
ensure that the appropriate site or warehouse location IDs are identified.
2. If a warehouse location attached to the lot or serial number used for the transactions has a
negative quantity-on-hand, entry and/or release of unprocessed receipts batches or entry of
physical adjustments may be required to increase quantity available before making the transfer.
See ―Entering Adjustments‖ on page 58 for more information.
3. Open Transfers (10.040.00) and enter the information for the transferred inventory.
4. To enter lot or serial numbers for the transaction, click Lot/Serial in Transfers (10.040.00) to
access Lot/Serial Assignment (10.070.00). Otherwise, the software will select lot or serial
numbers based on the issue method assigned to the item.
5. Click Save on the toolbar. This step will allocate inventory for the ―from‖ location on the
transaction, decreasing quantity available.
6. Run the Release IN Batches (10.400.00) process to release batch transactions for posting to the
general ledger. See ―Inventory Batches‖ on page 64 for more information. This step decreases
quantity on hand for the inventory items at the ―from‖ location and increases quantity on hand for
the inventory items at the ―to‖ location. If Batch Handling is set to Release Now, Transfers
(10.040.00) will automatically call Release IN Batches (10.400.00).

Note You cannot transfer quantity that has been allocated to a project while the quantity is
allocated to the project. Use Project Inventory Allocation (10.080.00) to unallocate the quantity,
use Transfers (10.040.00) to transfer the quantity, and then use Project Inventory Allocation
(10.080.00) to allocate the quantity in the new site/location to a project.

Entering Kit Assemblies

To enter kit assemblies:
Refer to ―Kit Assembly (10.050.00)‖ on page 112 for more information.
1. Use Kit Assembly (10.050.00) to enter the stocking records of inventory kits.
2. Assign a unique Reference Number for the kit.
3. In Kit ID, choose the kit to assemble.
4. In Site ID, choose the site where the finished product will be stored.
5. Specify the Number of Kits to assemble for the kit ID, and the appropriate components will
automatically fill in the Detail grid. These detail lines list the kit components used for each kit
assembled. You can specify kit components by site ID, lot/serial number, or warehouse bin
location ID. If certain kit components do not have enough quantities on hand for the number of
kits to assemble, you can insert additional detail lines for these components to allow the Inventory
module to draw from multiple sites, warehouse bin locations, or lot numbers when assembling the
kit.
6. Enter the required lot or serial number if the kit being assembled is lot/serial tracked with the
assignment method of When Received into Inventory. You may also be required to enter or select
lot/serial numbers for any components that are also lot/serial tracked.
7. Enter the specific cost ID if the kit item valuation method is Specific Cost. If the item is also lot or
serial tracked and if Linked to Specific Cost Id is selected on Lot/Serial Number Setup
(10.250.01), then Specific Cost ID will be filled in by the lot/serial number.
60 Inventory

8. Click the Save button on the toolbar. This step will allocate inventory for the component items on
the transaction, decreasing quantity available.
9. Run the Release IN Batches (10.400.00) process to release batch transactions for posting to
General Ledger. See ―Inventory Batches‖ on page 64 for more information. This step decreases
quantity on hand for the inventory items that are components and increases quantity on hand for
the inventory kits being assembled. If Batch Handling is set to Release Now, Kit Assembly
(10.050.00) will automatically call Release IN Batches (10.400.00).
Each batch of kit assembly transactions updates the appropriate general ledger inventory account
(and subaccount) balances.
For each kit using the Standard Cost valuation method, the Inventory module calculates the assembly
variance to resolve any differences between overall kit costs and the sum of the individual
components making up the kit.
If the software generates batch control reports automatically and you attempt to release a batch with
kit components that do not have sufficient on-hand inventory quantities for the kit records created, the
software places the batch on hold and instead generates a shortage control report that list the short
components. If all components have sufficient on-hand quantities, this step increases the quantity for
the kit parent item and decreases the quantity for the kit component items.
Any transactions not costed are listed with an asterisk (*) on the batch control report for Kit Assembly
(10.050.00) or on the IN Edit (10.810.00) report. If none of the transactions in the batch have been
costed, the software places the batch on hold.

Note: You cannot assemble quantity that has been allocated to a project while the quantity is
allocated to the project. Use Project Inventory Allocation (10.080.00) to unallocate the quantity, and
then use Kit Assembly (10.050.00) to assemble the quantity.

Entering Project Inventory Allocations

To allocate inventory to a project:
Refer to ―Project Inventory Allocation (10.080.00)‖ on page 124 for more information. If you have the
Order Management module, make sure that Order Management‘s Process Manager (40.400.00) is
running.
1. Use Project Inventory Allocation (10.080.00) to allocate inventory to projects.
2. Assign a unique Reference Number for the project inventory allocation.
3. In Allocation Type, choose Allocate to allocate inventory to a project.
4. In Transaction Date, choose date for the transaction. The default is the current business date in
Microsoft Dynamics SL.
5. In Inventory ID, type or select the inventory item ID. Or, click Find Item to lookup the item.

Note You cannot allocate a non stock inventory item or an expired lot number or serial number to
a project.

6. In Site ID, type or select the site ID where the inventory quantity exists.
7. In Warehouse Bin Location, type or select the warehouse bin location where the inventory quantity
exists.
8. In Quantity, type the quantity.
9. In Project, type or select the project ID to which you want to allocate the inventory.
10. In Task, type or select the task ID to which you want to allocate the inventory.
11. If this is a lot or serial number-controlled item, click Lot/Serial to open Bin/Lot/Serial Assignment
(10.080.01), which displays status and history information for the lot/serial numbers for the item.
12. Set Handling to Completed.
 Running and Maintaining Inventory 61

13. Click Save on the toolbar. This step will allocate inventory to the project that you specified,
decreasing the quantity available to processes that do not use project allocated inventory.

Note No general ledger transaction is created.

To unallocate inventory from a project:

Refer to ―Project Inventory Allocation (10.080.00)‖ on page 124 for more information. If you have the
Order Management module, make sure that Order Management‘s Process Manager (40.400.00) is
running.
1. Use Project Inventory Allocation (10.080.00) to unallocate inventory to projects.
2. Assign a unique Reference Number for the project inventory unallocation.
3. In Allocation Type, choose Unallocate to remove an existing project inventory allocation.
4. In Transaction Date, choose date for the transaction. The default is the current business date in
Microsoft Dynamics SL.
5. In Inventory ID, type or select the inventory item ID. Or, click Find Item to lookup the item.
6. In Site ID, type or select the site ID where the project inventory allocation exists.
7. In Warehouse Bin Location, type or select the warehouse bin location where the project inventory
allocation exists.
8. Click Project Inventory to launch Project Inventory (10.220.00). Choose one of the inventory items
listed, and then click Select. Or, specify alternative search criteria, click Refresh, and choose a
different project or task, or both, to which this inventory item is allocated.
9. In Quantity, type the quantity that you want to unallocate. The quantity to unallocate cannot be
greater than the original quantity allocated.
10. If this is a lot or serial number-controlled item, click Lot/Serial to open Bin/Lot/Serial Assignment
(10.080.01), which displays status and history information for the lot/serial numbers for the item.
11. Set Handling to Completed.
12. Click Save on the toolbar. This step will unallocate inventory from the project, increasing quantity
available.

Note

 No general ledger transaction is created.

 You cannot issue material to a work order that is already allocated to a project. Use Availability
(21.410.00) to examine the inventory allocated to projects .
62 Inventory

Lot/Serial Number Maintenance

Assigning Lot/Serial Numbers
To assign lot/serial numbers during transactions:
See ―Lot/Serial Assignment (10.070.00)‖ on page 121 for more information.
1. While in a data entry (transaction) screen, click Lot/Serial to open Lot/Serial Assignment
(10.070.00).
2. Accept or change the lot/serial numbers assigned by the software. (Numbers will be assigned
based on defaults set up in the item record using Inventory Items (10.250.00), Product Classes
(10.280.00), or IN Setup (10.950.00).)
3. Click OK.

Changing Lot Numbers

Lot numbers can be changed by performing a two-step transfer. In this process, the numbers to be
reassigned are selected using Transfers (10.040.00), and the new numbers are then assigned using
Receipts (10.010.00). See ―Transfers (10.040.00)‖ on page 106 and ―Receipts (10.010.00)‖ on
page 85 for more information.

Note: You cannot modify lot numbers or serial numbers that are allocated to project unless you first
unallocated them by using Project Inventory Allocation (10.080.00)

To change lot numbers:

1. Open Transfers (10.040.00).
2. In Transfer Type, select 2-Step.
3. Enter the inventory ID and quantity of the item for which you are changing the lot number(s).
4. Click Lot/Serial. The software selects the lot numbers based on the item‘s issue method.

Note: You can change the lot number selected, but you must select a number listed in the lot
history for the item. Note that you are not assigning the new lot number(s) in this step.

5. Click Save on the toolbar. Make a note of the transfer number assigned to the batch.
6. Run the Release IN Batches (10.400.00) process to release batch transactions for posting to
General Ledger. See ―Inventory Batches‖ on page 64 for more information. This step decreases
quantity on hand for the inventory items at the ―from‖ location and increases quantity on hand for
the inventory items at the ―to‖ location. If Batch Handling is set to Release Now, Transfers
(10.040.00) will automatically call Release IN Batches (10.400.00).
7. Open Receipts (10.010.00).
8. In Transfer Number, type the number you noted in step 5, or press F3 to open a possible values
list of all available two-step transfers that can be received.
9. The software will automatically generate the detail transfer transaction information. The
automatically assigned lot number will be the same as the lot number issued for the transfer.
Click Lot/Serial to override the lot number assigned to the transaction.
10. Run the Release IN Batches (10.400.00) process to release the transaction batches for posting to
General Ledger. This step increases quantity on hand for the inventory items. If Batch Handling is
set to Release Now, Receipts (10.010.00) will automatically call Release IN Batches (10.400.00).
 Running and Maintaining Inventory 63

Updating Lot/Serial Number Status

You might use this procedure when certain lots or serial numbers are put on hold when received (for
example, when items need to be inspected before they can be released for sale). See ―Lot / Serial
Numbers (10.360.00)‖ on page 296 for more information.
To update lot/serial number status:
1. Open Lot / Serial Numbers (10.360.00) and enter the inventory ID for the item.
2. Enter either the Lot/Serial Number or the Manufacturer Lot/Serial Number.
3. Change the status of the lot or serial number. The choices for Status are Available and On Hold.
4. Click Save on the toolbar.
64 Inventory

Inventory Batches
Editing and Voiding Inventory Batches
Use the following procedure to edit and delete inventory batches that have not been completed or
posted.
To edit inventory batches:
1. Open the transaction entry screen for the type of batch you want to edit and enter an existing
batch number for a batch that has not been completed or posted. Do this by placing the cursor in
Batch Number and pressing F3 (or double-right-clicking). Batch List is displayed, showing you the
existing batches from which you can select.
2. Make changes to the batch as needed, and click Save on the toolbar to save, or Finish to save the
changes and release the batch for processing if Batch Handling has been set to Release Now.
To void inventory batches:
1. Open the transaction entry screen for the type of batch to void and enter the Batch Number. To
view a list of batches to choose from, place the cursor in Batch Number and press F3 (or double-
right-click). Batch List is displayed, showing the existing batches from which you can select.
2. Click the Delete button on the toolbar. The software prompts you for the correct action:
 Yes — Delete the batch (all batch information is removed from the database and any reserved
inventory items are made available).
 No — Stop the delete function (all information related to the batch is retained in the
database).

Releasing Inventory Batches

Use the following procedure to release transaction batches for posting to the general ledger. See
―Release IN Batches (10.400.00)‖ on page 333 for more information.

Note: Batches can have a status of Balanced, Partially Release, or Completed before they are released
in Release IN Batches (10.400.00). A batch created by the Purchase Order module is the only type of
batch that will be displayed in Release IN Batches (10.400.00) with the status of Completed.

To release inventory batches using Release IN Batches (10.400.00):

1. Open Release IN Batches (10.400.00).
2. If you want to release all unposted batches, click Select All. Otherwise, click Clear Selections and
use Selected to indicate which batches should be posted.
3. Click Begin Processing. The batches are released for processing, which includes updates to
quantity on hand, quantity available, and quantity allocated. If Automatic Batch Reports is
selected in GL Setup (01.950.00), a batch control report will be printed. Otherwise, see
―Reprinting Batch Control Reports‖ on page 65.
Batches can be released immediately after they are entered in one of the transaction entry screens by
choosing Release Now in Batch Handling.
 Running and Maintaining Inventory 65

To release inventory batches during transaction entry:

1. Open the transaction entry screen for the type of batch you want to enter, and complete the
transaction entry.
2. Choose Release Now in Batch Handling.
3. Click Finish on the toolbar to save the batch to release the batch.
4. The Process Status (10.400.00) dialog box appears, showing the release progress. If the batch
has been processed without any errors and is not suspended, Process Status (10.400.00) will
close automatically. If the batch has not processed without errors and has a partially released
status, Process Status (10.400.00) will not close automatically. It will display the file name of an
event log that was captured to assist with determining why the batch failed to process properly.
The example in the following figure illustrates a case where the batch has not been successfully
processed. Click OK to close the dialog box. (This dialog box also displays when you release
batches in Release IN Batches (10.400.00).)

Figure 3: Process Status (10.400.00)

5. After a batch has been released, if Automatic Batch Reports has been selected in GL Setup
(01.950.00), a batch control report that lists all batches entered is automatically generated.
6. Use Post Transactions (01.520.00) in General Ledger to post released batches if Update GL for All
Inventory Transactions was selected in IN Setup (10.950.00). If Update GL for All Inventory
Transactions was not selected in IN Setup (10.950.00), the batches will have a status of
Completed.

Reprinting Batch Control Reports

Use the following procedure to reprint batch control reports, or to print one for the first time if you did
not select Automatic Batch Reports in GL Setup (01.950.00). See ―Reprint IN Batch Control Reports
(10.410.00)‖ on page 336 for more information.
To reprint batch control reports:
1. Open Reprint IN Batch Control Reports (10.410.00).
2. If you want to print all batch reports, click Select All. Otherwise, click Clear Selections and use
Selected to indicate which batches should be posted.
3. Select options and enter field information as required.
4. Click Begin Processing.
66 Inventory

Revising Costs
The following procedures describe how to perform revisions to standard costs. For standard costs, you
can update costs individually using Inventory Items (10.250.00), or you can perform mass updates as
described in the following procedures.

Revising Pending Costs

Use this procedure to update pending standard costs whenever you will be making similar cost
changes to multiple items. This process provides an alternative to updating each of these items one at
a time using Inventory Items (10.250.00), and provides a number of ways to automatically compute
the changes.
This procedure is typically used toward the beginning of the standard cost update cycle in preparation
for the start of a new fiscal year. It is used to load initial values into pending standard cost fields. You
can then review and analyze these values using reports and modify them individually until they are
ready to become current standard costs. See ―Update Pending Costs / Rates (10.520.00)‖ on
page 338 for more information about this process.
To update pending standard costs:
1. Open Update Pending Costs / Rates (10.520.00).
2. Select the pending cost/rate update option and the method of update.
3. If you want to update pending costs for every item in Inventory with a valuation method of
Standard Cost, select All and click Begin Processing.
4. If you want to choose a specific inventory item or product class to update, select Specific and
enter the inventory or product class ID.
5. Click Refresh to load the inventory items or product classes into the grid for processing
6. Enter the Change Amount/Percent to set the direct, variable, or fixed pending costs.
7. Click Begin Processing.
8. Print and review the Standard Cost Change Preview (10.635.00) report to see your current
standard costs and pending standard costs side by side, along with the extended costs of current
on-hand inventory based on both current and pending (proposed) standard costs. It is
recommended that you use the descending sort on the extended variance amount. This sort
highlights major impact changes as well as mistakes where the pending cost is abnormally low or
high, resulting in a larger than expected variance.

Revising Standard Costs

Use Update Standard Costs from Pending (10.530.00) to perform a mass update to standard costs
and/or to perform an inventory revaluation for some or all standard cost items. This procedure is
typically used at the end of the standard cost update cycle in preparation for the start of a new fiscal
year. However, it may be used at any time during the course of a fiscal year to update standard costs
and/or revalue the inventory position. This procedure is used after pending standard costs have been
computed, reviewed, and analyzed, and are ready to become current standard costs. See ―Update
Standard Costs from Pending (10.530.00)‖ on page 341 for more information about this process.
At a high level, follow the process listed below:
1. Run Update Standard Costs from Pending (10.530.00) to update component standard costs if
they have any pending changes with an effective date equal to or prior to today‘s date.
2. Run Update Kit Standard Cost (10.551.00) to calculate a new pending standard cost for the kits
from the current cost of the components with today‘s date for the pending date. Steps 2 through 4
below are required only if there are standard cost kits defined.
3. Run Update Standard Costs from Pending (10.530.00) again to update the kit‘s current cost.
4. If subassemblies have been defined (a kit can be a component of another kit) repeat steps 1 and
2 below for each level of subassembly you need.
 Running and Maintaining Inventory 67

Use the following detailed procedure to update standard costs or revalue inventory:
1. Open Update Standard Costs from Pending (10.530.00).
2. Select your standard cost update option. Your choices are:
 Revaluation of Inventory — This option performs an inventory revaluation for all Standard Cost
valuation items to correct any variance between the calculated total cost and actual total
cost. This option does not establish new standards nor does it transfer the Pending Standard
Cost values to the Current Standard Cost fields.
 Apply Pending Standard Cost Changes — This option processes all items of Standard Cost
valuation method, transfers pending standard costs to current standard costs based on user
specified effective date, and revalues inventory accordingly based on new standard costs.
 Product Class — This option applies pending standard cost changes by product class.
3. Enter field information as required. See ―Update Standard Costs from Pending (10.530.00)‖ on
page 341 for more information about the fields in this screen.
4. Click Refresh to loads the items into the grid for processing.
5. Click Begin Processing.

Revising Standard Costs for an Individual Item or Site

An item‘s standard cost can be changed at any time. If it is changed, only the valuations of
subsequent inventory transactions are affected. When changing an item‘s standard cost, you also
must change the value of its on-hand inventory. This can be done for an individual item, site, or
selected items associated with a particular site as follows:
1. Open Inventory Sites (10.255.00).
2. Choose the Inventory ID and Site of the item you want to change.
3. Click the Cost/Price tab.
4. In the Standard Costs, Pending area, type the current date in Date.
5. Enter the new costs as needed in Direct, Fixed Overhead, and Variable Overhead.
6. Click Save on the toolbar.
7. Open Update Standard Costs from Pending (10.530.00).
8. In Standard Cost Update Option, choose Apply Pending Standard cost changes.
9. In the Items area, click Specific to update individual items.
10. To update the cost for a specific inventory item, type the identifier in Inventory ID. To update costs
for a specific site, type the site‘s identifier in Site ID.
11. Click the Refresh button.
12. Click Begin Processing. The process will update the current standard costs with the values in the
pending standard cost fields in Inventory Sites (10.255.00) or Inventory Items (10.250.00). The
process will also generate and release cost adjustments to revalue any on-hand quantities for the
items whose standard costs have changed.

Note: Standard costs can also be changed in Update Pending Costs / Rates (10.520.00). See ―Update
Pending Costs / Rates (10.520.00)‖ on page 338 for more information.
68 Inventory

Performing Inquiries
The following procedures describe how to perform inventory inquiries.

Item Inquiries
Use the following procedure to find an inventory item when some information about the item is known.
You can look up items based on description, product class, manufacturing class, and several other
item characteristics on an individual basis or in combination as described in the procedures listed
below. When Inventory Item Lookup (10.210.00) opens, an asterisk (*) is displayed in several fields.
These fields allow you to enter partial information when searching for an item.

Examples:
To find an item ID that begins with K, type K* in the Part Number box and click Refresh.

To find an item ID that ends with K, type *K in the Part Number box and click Refresh.
To find an item ID that contains a K, type *K* in the Part Number box and click Refresh.

The K in these examples can be replaced with any single character or number. It can also be replaced
with multiple characters and numbers.
See ―Inventory Item Lookup (10.210.00)‖ on page 131 for more information.

To look up an item by vendor and site:

1. Open Inventory Item Lookup (10.210.00)
2. Select the Vendor Part Nbr check box.
3. In Vendor ID type the vendor ID you want to search, or press F3 and select the ID from the
possible values list.
4. Click Refresh to list all of the items purchased from that vendor.
5. You can enter inventory item information to narrow the inquiry and make it more specific. Select
the Single Site check box.
6. In Site ID type the ID of a site you want to search, or press F3 and select the ID from the possible
values list.
7. Click Refresh to list all of the items purchased from that vendor in the site selected.
8. Repeat this procedure for any other items you want to review.
To look up items that have quantity allocated to a specific project ID:
1. Open Inventory Item Lookup (10.210.00)
2. Select the Qty Allocated to Projects check box.
3. In Project ID type the project ID you want to search, or press F3 and select the ID from the
possible values list.
4. Click Refresh to list all of the items that have quantity allocated to that project.
5. Repeat this procedure for any other items you want to review.
 Running and Maintaining Inventory 69

To look up items that have quantity allocated to any project ID:

1. Open Inventory Item Lookup (10.210.00)
2. Select the Qty Allocated to Projects check box.
3. In Project ID, accept the default asterisk (*).
4. Click Refresh to list all of the items that have quantity allocated to any project.
5. To review the allocations by project ID, click Availability, and then click Inventory Allocated to
Projects Inquiry to open Inventory Allocated to Projects Inquiry (10.224.00).
6. Repeat this procedure for any other items you want to review.
70 Inventory

Status Inquiries
Use the following procedure to look up the status of a specific inventory item, including quantity, cost,
and valuation information.
To look up status information by item:
1. Open Inventory Status Inquiry (10.220.00).
2. Type the inventory ID of the item you want to review. The screen displays setup information about
the item, as well as inventory quantities and total cost by site.
3. Click More Item Information to open Inventory Items (10.250.00) to review or update setup
information for the item.
4. Click Location to view the item‘s quantity information at each site and warehouse location.
5. Click Costs to view cost information, including cost layers, for the item.
6. Click Transaction Detail to view current and historical inventory transactions that include the item.
7. Click Work Orders to view current and historical work orders that create supply of the item or work
orders that require use of the item.
8. Click OM Documents to view current and historical sales orders and shippers that include the
item.
9. Click Purchase Orders to view the item‘s current and historical purchase orders.
10. Click Physical Inv to view the item‘s physical inventory status.
11. Click Replenishment to view inventory replenishment information for the item.
12. If this is a lot or serial number-controlled item, click Lot/Serial to open Lot / Serial (10.229.00),
which displays status and history information for the lot/serial numbers for the item.
13. Click Item History to view the item‘s period- and year-to-date purchase and sales information.
14. Click Availability to view the item‘s Order Management planning and available-to-promise
information.
15. Repeat this procedure for any other items you want to review.
 Running and Maintaining Inventory 71

Project Allocated Inventory Inquiries

Use the following procedure to look up the status of project allocated inventory.
To look up project allocated inventory information:
1. Open Inventory Allocated to Projects Inquiry (10.224.00).
2. Type part or all of the following for the item you want to review:
a) Inventory ID
b) Site ID
c) Project ID
d) Task ID
3. In Allocation Date, specify a date range. (optional)
4. Click to select or click to clear Include project inventory with no qty remaining to issue.
5. Click Refresh.
6. Click Activity to view the item‘s project allocated inventory activity.
7. If this is a lot or serial number-controlled item, click Lot/Serial to open Lot / Serial History
(10.224.02), which displays status and history information for the lot/serial numbers for the item.
8. Repeat this procedure for any other items you want to review.
72 Inventory

Generating and Printing Reports

For complete descriptions of the Inventory reports that Microsoft Dynamics SL offers, see the
―Reports.‖
To generate Inventory reports:
1. Open the Inventory menu, select the Reports option, and select the name of the report you want
to view or print.
2. Select the format, sort order, and selection criteria for the report output. For an explanation of the
standard report option fields used to generate reports, see the System Manager online help or
user guide for more information. Also see the specific report description in the ―Reports‖ section.
3. Click Printer Options to change the destination of the report output (display, file, or printer).
4. Click Print to generate the report.
To print an Inventory report using the Application Server:
1. Open the Inventory menu, select the Reports option, and select the name of the report you want
to print.
2. Complete the fields and options on each tab of the ROI screen. See the System Manager online
help or user guide for more information.
3. From the toolbar, choose Edit | Submit to Application Server. See the Application Server online
help for information on completing this process.
 Running and Maintaining Inventory 73

Closing Inventory
The following procedures explain how to close the Inventory module for an accounting period, perform
integrity checks, and delete archive detail.
 Closing facilitates balancing inventory accounts to the appropriate accounts in the general ledger.
It also performs certain system housekeeping functions such as deleting transactions not needed
by the Inventory module and setting period-to-date (PTD) fields to zero.
 Integrity checking validates that the Inventory database is in order.
 Deleting archive detail removes specified inventory items from the active database(s).
In general, you should perform system maintenance procedures in the order listed below.

Validating Inventory (Integrity Checking)

You should validate inventory on a consistent basis. See ―IN Integrity Check (10.990.00)‖ on page 346
for more information.
To validate inventory:
1. Exit Microsoft Dynamics SL and back up the transaction database and log file. Refer to the System
Manager online help or user guide for more information.
2. Sign back onto Microsoft Dynamics SL and open IN Integrity Check (10.990.00).
3. Select Validate Inventory.
4. Click Begin Processing.
5. If the software discovers an error, an event log is generated. The event log provides important
information, but only supplies item and site values. To identify the exact source of the
inconsistency, generate the following reports:
 Inventory Items (10.600.00)
 Inventory Valuation (10.620.00)
 Inventory Trial Balance (10.630.00)
6. After you locate the source of the inconsistency, rebuild the information using the ―Rebuilding
Inventory‖ procedure on page 74.

Pre-Closing Inventory
Pre-closing Inventory allows you to check that you are ready to close the Inventory module for the
period.
To pre-close Inventory:
1. Review open inventory files to ensure that all documents (sales, receipts, adjustments, etc.) have
been entered for the period.
2. Generate the IN Edit (10.810.00) report and check for any open inventory batches.
3. Release any open inventory document batches identified in step 2. See ―Inventory Batches‖ on
page 64 for more information.
4. Open General Ledger‘s Post Transactions (01.520.00) and click Begin Processing. This process
will post released batches of transactions to the appropriate general ledger accounts. See the
General Ledger online help or user guide for more information.
5. Print the following reports to assist in balancing inventory records to the general ledger:
 Inventory Valuation (10.620.00)
 Trial Balance (01.610.00) in the General Ledger module
6. Compare the account totals of the Inventory Valuation (10.620.00) report to the amount shown
for the corresponding inventory account on the Trial Balance (01.610.00) report. If the figures
74 Inventory

match, you are ready to close the Inventory module for the period. (Go to step 8.) If they do not
match, Generate the GL Transactions (01.680.00) report and:
 Review the inventory accounts and subaccounts to see if any transactions have been entered
as journal entries through the General Ledger module and not through the Inventory module.
 Determine if any inventory transactions have been entered to future general ledger periods.
7. Fix any errors and then repeat steps 4, 5, and 6. If you still cannot find the error, you will need to
rebuild inventory information using IN Integrity Check (10.990.00). See ―Rebuilding Inventory‖ on
page 74 for more information.
If the period end is also the year end, complete a physical inventory before proceeding. Refer to
―General Physical Inventory Procedures‖ on page 77 for more information.

Rebuilding Inventory
Use this procedure when you discover inconsistent item history, quantity, or cost information. Refer to
―IN Integrity Check (10.990.00)‖ on page 346 for more information.
To rebuild inventory:
1. Exit Microsoft Dynamics SL and back up the transaction database and log file. Refer to the System
Manager online help or user guide for more information.
2. Sign back onto Microsoft Dynamics SL and open IN Integrity Check (10.990.00).
3. If it was determined by running reports or reviewing Inventory Item History (10.251.00) that the
history for items is incorrect, select Rebuild Inventory Item History.
4. If it was determined by running reports or reviewing Inventory Items (10.250.00) that inventory
quantities are incorrect, select Rebuild On Order Quantities.
5. If it was determined by running the Validate Inventory integrity check that on-hand quantity and
cost information is inconsistent, select Rebuild Item Quantities and Costs.
6. Click Begin Processing. The software rebuilds the information you selected.

Closing Inventory for the Period or Year

To close the Inventory module for the period/year in the general ledger:
1. Exit Microsoft Dynamics SL and back up the database and transaction log file. Refer to the System
Manager online help or user guide for more information.
2. If using the Financial Statement Translation module and the Bi-Monetary Inventory Tracking
feature in the Inventory module, run the Historical Rate Update (25.540.00) process for each of
the translation definitions affected.
3. Sign on to Microsoft Dynamics SL and open General Ledger‘s Closing Process (01.560.00).
4. Verify the current fiscal period.
5. When closing for a period, select Period under Closing Type. When closing for a year, select Year.
6. Select Delete Detail if you want to delete obsolete activity detail in Inventory.
7. Click Begin Processing.
 Running and Maintaining Inventory 75

Deleting Inventory Items from the Database

To delete an inventory item that you no longer need:
1. Make sure that the inventory quantity balance is equal to zero and that the inventory cost balance
is equal to zero by using the Include Zero Balance format of the Inventory Valuation (10.620.00)
report.
2. Make sure that the inventory item is not on any open sales orders, purchase orders, work orders,
kits, bills of material, or unreleased inventory batches.
3. Open the Inventory Items (10.250.00) screen
4. In the Inventory ID box, type the inventory ID you would like to delete.
5. Click Delete on the toolbar or press DELETE on the keyboard.
6. A confirmation message will appear asking if you are sure you want to delete this item. If the
inventory item is not being used elsewhere in the system, the item will be deleted.
76 Inventory
 Performing a Physical Inventory 77

Performing a Physical Inventory

Introduction to Performing a Physical Inventory
This section provides a general set of procedures for performing a physical inventory, organized in
stages. Then it provides specific procedures you can use to fine-tune the physical inventory process for
your organization.

General Physical Inventory Procedures

This section explains how to count items and/or locations in a given inventory site and update
inventory with the book-to-physical adjustments. See ―Physical Inventory‖ on page 29 for more
information.
Make sure that all batches that can affect inventory are released prior to beginning a physical count.
While you are counting your items, do not move inventory into or out of the warehouse.

Note: Users must not create or release new batches that affect inventory (from the Purchasing or
Order Management module for example) from the time that you generate inventory tags until you have
fully released all physical inventory adjustment batches.

For more information on processing options, see the appropriate description in the ―Physical Inventory
Screens‖ section.

Selecting Items or Locations to Count

Use this procedure to select items or locations to count and take a snapshot of (freeze) inventory
quantities. You can run either a full physical inventory (all items/locations with a count status of
available will be included) or a cycle count (only selected items/locations will be included). See
―Physical Inventory‖ on page 29 for more information. And see ―Generate Inventory Tags (10.395.00)‖
on page 323 for complete descriptions of the fields in this screen.

Note: If you are cycle counting using ABC codes, movement classes, or cycle count IDs, you need to
define these codes using the appropriate maintenance screen before conducting the cycle count.

To select items or locations to count:

1. Open Generate Inventory Tags (10.395.00), and on the Item Selection tab, assign a Physical
Count ID. The ID you enter uniquely identifies this physical inventory and appears on all other
physical inventory screens and reports to specify which inventory you are processing. If you are
creating a new physical inventory, enter a physical count ID that does not exist in the system. If
you want to modify the items or locations selected for a previous physical inventory, enter an
existing physical count ID.

Note: A snapshot is a record of inventory quantities when they were frozen. If the status is In
Progress, the items or locations selected are added to the items and locations that already exist
for this physical inventory ID. The old snapshot of quantities is preserved, but a new snapshot is
taken for the items and locations that are added.

2. In the screen header, enter the site ID where the physical inventory will be taken, the date of the
count, and a description of the physical inventory.
3. In the Physical Inventory or Cycle Count list, choose whether you want to run a full physical
inventory or a cycle count.
4. If you are cycle counting, indicate in the Select Items or Locations list whether you want to count
items or locations, and choose a cycle count selection method.
78 Inventory

5. On the Other Options tab, indicate how you want to order your tags/lines—by location ID, item ID,
item description, product class, or a user-specified field. See ―Tagged vs. Untagged Inventories‖
on page 30 for more information.

Note: Choose this option carefully. It determines the sequence of tags for the following:

 Physical Count Entry (10.390.00)

 Physical Inventory Review (10.391.00)
 Physical IN Count Sheets (10.850.00) report
 Print Tags (10.852.00) report
 Physical IN Variance Preview (10.853.00) report
6. Enter the first tag/line number for the physical inventory. If you selected Tag Controlled Physical
Inventories in IN Setup (10.950.00), then enter the first tag number to use for this inventory. The
default value will be the last number used + 1. If you did not select Tag Controlled Physical
Inventories in IN Setup (10.950.00), then you are using line numbers. This field is set to 1 and
skipped. See ―Tagged vs. Untagged Inventories‖ on page 30 for more information.
7. Enter the number of blank tags you want to create. Blank tags have no item, lot/serial number,
location, or book quantity. They default to a void status and can be used for unexpected items or
items in unexpected locations (for example, items or locations that the software did not know
about and for which no specific tags were created). See ―Handling Unexpected Items and Items in
Unexpected Locations‖ on page 82 for more information.

Note: Alternatively, you can insert new tags/lines in Physical Inventory Review (10.391.00). The
advantage to creating blank tags in Generate Inventory Tags (10.395.00) is that you can preserve
the contiguous tag sequence. If you insert a new line in Physical Inventory Review (10.391.00), it
may not be contiguous if another physical inventory was generated after the first one.

8. Select whether you want to create tags/lines for items/locations with book quantity of zero (no
quantity-on-hand).
9. Click Begin Processing. The software takes a snapshot of inventory quantities.

Printing Count Sheets and Tags

Use the following procedure to print tags and count sheets that help you perform a physical inventory.
Typically, use count sheets for cycle counts, and tags for full physical inventories. Count sheets and
tags can also be used together if you want to leave the tags attached to your items but record the
physical counts on count sheets which are then used for data entry. The tags can then be used for
recording any quantities that move into or out of inventory during the book-to-physical reconciliation.
1. If you are using count sheets, print the Physical IN Count Sheets (10.850.00) report. You can
select whether to include book quantities on the count sheet.
2. If you are using tags, print them using the Print Tags (10.852.00) report. You can specify all tags
or select a range of tag numbers or a specific tag status to print. You can also use this report to
reprint tags or print blank tags.
 Performing a Physical Inventory 79

Recording Physical Inventory Counts

Use the following procedure to record the counts from a physical inventory and to review the tags and
variances before updating Inventory with the adjustments. See ―Physical Count Entry (10.390.00)‖ on
page 307 for complete descriptions of the fields in this screen.
To record physical inventory counts:
1. Using the count sheets and tags, record the physical counts of the inventory items in the selected
site. Collect the tags for processing, or record the counts on a count sheet and leave the tags on
the items. The latter is preferred if you need to double-check physical counts for items with large
variances. Also, the tag is a good place to record quantities added to or removed from inventory
after the count is done but before review and reconciliation is complete. Assign tags or count
sheets to one or more people to enter count quantities.
2. Open Physical Count Entry (10.390.00) to enter the tag number and physical count quantities for
a particular physical inventory. Any number of users can simultaneously access this screen for the
same physical inventory. After you enter the Physical Count ID, the only enterable fields on this
screen are Tag Number and Physical Quantity. The other fields were originally entered in Generate
Inventory Tags (10.395.00) and are display-only.
3. Open Physical Inventory Review (10.391.00) to handle tag exceptions such as voiding or entering
items for which no tag was printed. Only one user can access this screen at a time. You can create
a new tag number by clicking New Tag Number on the Tag Details tab and typing in the Physical
Quantity, Inventory ID, Warehouse Bin Location, Lot/Serial Number, and Unit Cost of the item. A
new tag number is automatically assigned and the line type is set to User Entered. Last Tag
Number and Total Number of Tags on the Count Information tab are automatically updated. Only
one user can access this screen at a time.
4. Run the Physical IN Variance Preview (10.853.00) report to print and review the variances of book
to physical quantities and costs.
5. Print the Physical IN Count Sheets (10.850.00) report or the Print Tags (10.852.00) report if you
need to re-count any items or print exceptions to be verified such as unusually large variances,
voided tags or tags not yet entered.

Updating Inventory with Adjustments

To update Inventory with new physical inventory counts:
See ―Reconcile Physical Inventory (10.397.00)‖ on page 330 for more information.
1. Open Reconcile Physical Inventory (10.397.00) to update physical inventory history and create
inventory adjustment batches that will update inventory quantities and costs.
2. Enter the Physical Count ID, which was set up in Generate Inventory Tags (10.395.00) and cannot
be modified in this screen. Only physical inventories with a status of Balanced can be entered
here. Use Physical Inventory Review (10.391.00) to set the Status to Balanced.
3. Enter the Period to Post.
4. Enter the Number of Adjustments Per Batch. If you have thousands of inventory items, it may be
more convenient to split the adjustments into several batches for easier review of each batch. Any
negative quantity adjustments will be allocated when the adjustment transaction is created to
prevent over allocation of item quantities.
5. Open Adjustments (10.030.00) to review and release the adjustment batches, use Release IN
Batches (10.400.00) to release them, or select Automatically Release Adjustments Batches in
Reconcile Physical Inventory (10.397.00) to have them released automatically. Your inventory
quantities are now updated with the proper quantity and cost adjustments.
80 Inventory

Specific Physical Inventory Procedures

The following inventory procedures describe additional tasks or steps that support your efforts to
perform effective physical inventories.

Defining ABC Codes

Use ABC codes to uniquely identify groups of items for a variety of inventory analysis, counting, and
reporting functions. See ―Physical Inventory‖ on page 29 for more information. Typically, three codes
or groupings are used, but that number (not to exceed three) can be determined by the user.
Examples of valid codes are A, B, and C. After they are defined, ABC codes can be associated with
inventory items in Inventory Items (10.250.00), and for locations, in Warehouse Bin Locations
(10.340.00).
To define ABC codes:
See ―ABC Codes (10.381.00)‖ on page 303 for complete descriptions of the fields used to define ABC
codes.
1. Open ABC Codes (10.381.00) and enter a code in ABC Code.
2. Type a description of the code in Description.
3. Enter a count frequency (number of times to count per year).
4. In Accuracy Tolerance %, enter the accuracy objective for the items or locations in this ABC code.
For example, if you enter 95, then your objective for the items or locations in this ABC code is 95%
accuracy.
5. In ABC Code %, enter the percentage of this item or location that you want to be assigned to this
ABC code when you run the ABC Codes (10.861.00) report and ABC codes are recalculated. For
example, if you set the ABC Code % to 20% for code A and run the ABC Codes (10.861.00) report,
it will assign the top 20% of the most expensive items an A code.
6. Click Save on the toolbar.
7. Repeat steps 1 through 6 for your other ABC codes.
8. Open Warehouse Bin Locations (10.340.00) and enter the appropriate ABC codes for all the
locations. You will also need to enter ABC codes when you enter inventory items.
 Performing a Physical Inventory 81

Defining Movement Classes

Use movement classes to group items for a variety of inventory analysis, counting, and reporting
functions. See ―Physical Inventory‖ on page 29 for more information.
To define movement classes:
See ―Movement Classes (10.382.00)‖ on page 305 for complete descriptions of the fields used to
define movement classes.
1. Open Movement Classes (10.382.00) and enter a code in Movement Class ID.
2. Type a description of the code in Description.
3. Enter a count frequency (number of times to count per year) and an accuracy tolerance for the
code.
4. In Percent of Movement in Class, enter the percentage of total inventory movement that you want
to fall within this movement class. For example, if you are stratifying all of your finished good items
into 10 movement classes and want 10% of sales to fall into each movement class, then enter 10
here.
5. Click Save on the toolbar.
6. Repeat steps 1 through 5 for your other movement classes.
7. Open Warehouse Bin Locations (10.340.00) and enter the appropriate movement classes for all
the locations. You will also need to enter movement classes when you define inventory items.

Defining Cycle IDs

Use cycle IDs to group inventory items or locations that you want to cycle count together. See ―Physical
Inventory‖ on page 29. Several cycle count selection methods use cycle IDs to ensure that all
items/locations will be counted sometime during the year.
To define cycle IDs:
See ―Physical Cycles (10.393.00)‖ on page 322 for complete descriptions of the fields used to define
cycle IDs.
1. Open Physical Cycles (10.393.00) and enter an ID in Cycle ID.
2. Type a description of the ID in Description.
3. Enter the accuracy tolerance.
4. Click Save on the toolbar.
5. Repeat this procedure for your other cycle IDs.

Marking Items/Locations to Never Count

You may have items and locations that you never want to include in your physical inventory. For
example, you may have items that are obsolete and no quantity is on hand, but the item is being kept
in the database for reference. Or you may have locations that are not actual storage locations, but are
staging areas where no items are typically kept. You indicate that an item or location should not be
counted by giving it a count status of Not Counted.
To mark an item or location to not be counted:
1. For items, open Inventory Items (10.250.00), enter an inventory ID in the header, and enter a
value of Not Counted for Count Status in the Physical Cycle tab.
2. For locations, open Warehouse Bin Locations (10.340.00), enter a site ID, and enter a value of
Not Counted for Physical/Cycle Count Status.
82 Inventory

Handling Unexpected Items and Items in Unexpected Locations

When you run Generate Inventory Tags (10.395.00), a tag is created for each item/location/lot/serial
combination found in the Inventory database for the site selected. You may have an item stored in a
location different than the location in the database. You may also encounter lot/serial numbers for an
item that is no longer in the database.
To handle unexpected items and locations:
1. Generate some blank tags when you run Generate Inventory Tags (10.395.00). You can also
create new tags in Physical Inventory Review (10.391.00), but there is no guarantee that
contiguous tag numbers will be assigned.
2. Enter the count information for any unexpected items or locations on the blank tags.
3. If you want to move items to the locations where they belong, wait until after the physical
inventory is complete. Open Transfers (10.040.00) and update the item‘s record to show the
quantity decrease at From Warehouse Bin Location and the quantity increase at To Warehouse
Bin Location.
For example, suppose that the following tags were generated by Generate Inventory Tags (10.395.00):

Tag Item Lot/Serial Location Book Qty Physical Qty Variance Qty
1 A 00 1 15 0 0

2 A 00 2 10 0 0

3 (blank)

When you count, you find that 10 of item A are in location 1, 10 in location 2, and 10 in location 3.
Since there is no tag for item A/location 3, enter it on a blank tag (#3). Enter the count information on
tags as follows:

Tag Item Lot/Serial Location Book Qty Physical Qty Variance Qty
1 A 00 1 15 10 -5

2 A 00 2 10 10 0

3 A 00 3 0 10 +10

If the units of item A in location 3 are not where they belong, and you want to move them to location 1,
do not move until after the inventory is complete. Then physically move them using Transfers
(10.040.00) as described in step 3.
 Performing a Physical Inventory 83

Using Tag Control

The software provides complete control of the tags used to count your inventory.
To print a list of tags that have not been entered, have been voided, or need to be reprinted:
Run the Physical IN Count Sheets (10.850.00) or Physical IN Variance Preview (10.853.00) report.
To view tag numbers entered on book-to-physical adjustment transactions, do the following:
Run the Print Tags (10.852.00) report.
To view the book and physical counts for each tag kept in the database:
Open Physical Inventory Review (10.391.00).

Handling Items with Quantity-on-Hand of Zero

You have several ways to handle items that have a quantity-on-hand of zero in the Inventory database.
Since the software defaults the physical quantity on each tag to zero, you must choose whether or not
you want to confirm this for every tag by entering the zero quantity in Physical Count Entry
(10.390.00). You can either specify in Physical Inventory Review (10.391.00) that tags with zero book
quantity default to status Entered, or use the Mass Update button in this screen to set the status to
Entered when other tags have been entered. You can save time by not entering the zero quantities,
but you may lose some degree of tag control. We recommend that you use the third option below to
save time while retaining full tag control.
To force the entry of zero physical quantities for items with zero book quantities:
1. Open IN Setup (10.950.00) and click the Physical/Cycle tab.
2. Check the option for Default Status for Tags with Book Quantity = 0. All tags with zero book
quantity will default to a status of Not Entered. In order to balance a physical inventory, you will
need to enter the 0s in Physical Count Entry (10.390.00) to change the status to Entered.
To avoid requiring users to enter zero physical quantities for items with zero book quantities:
1. Open IN Setup (10.950.00) and click the Physical/Cycle tab.
2. Uncheck the option for Default Status for Tags with Book Quantity = 0. All tags with zero book
quantity will default to a status of Entered. You can now balance a physical inventory without
entering the 0s in Physical Count Entry (10.390.00) to change the status to Entered.
To enable users to set physical quantities for all items with zero book quantities to zero after all other
quantities (non-zero counts) have been entered:
1. Open IN Setup (10.950.00) and click the Physical/Cycle tab.
2. Check the option for Default Status for Tags with Book Quantity = 0. All tags with zero book
quantity will default to a status of Not Entered.
3. After entering all your non-zero counts in Physical Count Entry (10.390.00), open Physical
Inventory Review (10.391.00), Tag Details tab. Click Mass Update and select Set Physical
Quantity to 0 on Unentered Tags. All tags with a status of Unentered will have count quantity set to
0 and will have status changed to Entered.
84 Inventory

Deleting Physical Inventory Detail

Tags remain in the database until you choose to delete them. They provide a detailed history and audit
trail of all book-to-physical variances, but they also consume disk space and clutter up inquiry windows
over time.
To delete physical inventory detail:
1. Open Delete Physical Inventory Detail (10.399.00).
2. The cutoff date for deleting detail defaults from your selection in IN Setup (10.950.00). All detail
for physical inventories that are completed or voided and that have a count date on or before the
date entered will be deleted.
3. Click Begin Processing.

Reprinting Lost or Damaged Tags

Tags will occasionally need to be reprinted because they were lost or damaged either before or after
the counts were taken and entered into Physical Count Entry (10.390.00).
To reprint lost or damaged tags:
Run the Print Tags (10.852.00) report.
 Data Entry Screens 85

Data Entry Screens

Purpose of Data Entry Screens
On data entry (transaction) screens, you record the receipt, sale, adjustment, transfer, and assembly
of inventory items.

Receipts (10.010.00)
Use Receipts (10.010.00) to record the receipt of inventory item shipments including quantity, unit
cost, and other receipt-of-goods information. Record receipt of goods information in transaction
batches, entering the line-by-line batch details (lines of transactions making up batch information)
according to several entry options:
 One transaction line per type of item received (typically used for transaction batches containing
several types of items).
 One transaction line per batch (typically used for items received by lot).
 One transaction line per unit received (typically used for large or serialized items).
The entry option you choose depends largely on the inventory valuation method you use. For each item
using the FIFO or LIFO valuation method, entering receipt of goods information automatically creates a
new cost for the item. Cost layers and valuation methods are used when calculating inventory value.
You can change an item‘s valuation method by accessing Inventory Items (10.250.00). Changing a
valuation method can occur only for items that have zero quantity on hand. It is not recommended
that the valuation method be changed for items that have a transaction history. An item‘s valuation
method is not stored with historical transaction detail. Changing the valuation method will change the
assumptions about the data after the data has already been recorded, which could cause processes
that use historical transaction data to improperly calculate values. For Specific Identification valuation
method items, if Link to Specific Cost Id is selected on Lot/Serial Number Setup (10.250.01), a
lot/serial number must be entered and the Specific Cost ID value will be filled in automatically.
If you select Update GL For All Inventory Transactions in IN Setup (10.950.00), item financial
information entered in Receipts (10.010.00) automatically updates the general ledger balance for the
accounts payable clearing account and subaccount defined in IN Setup (10.950.00). Without that
option set, updating these balances requires you to enter and post the appropriate transactions using
the General Ledger or Accounts Payable modules.
If you are using the Purchasing module, you can enter an item‘s information into the database via the
Purchasing data entry functions. If you use Purchasing to enter an item‘s receipt-of-goods information,
do not complete Receipts (10.010.00) for the item. Doing so creates duplicate receipt of goods
information.
After you release a transaction batch, the software can generate a batch control report that lists all
transactions entered for the batch. This report is produced only if you select Automatic Batch Reports
in GL Setup (01.950.00). For each batch released, it is good practice to document the batch‘s
information by generating the IN Edit (10.810.00) report.
The following should be noted:
 All general ledger transactions created in Receipts (10.010.00) use real-time transaction dates.
Detail transactions contain the date of the original transaction; summary transactions contain the
date when the batch was released.
 During a Save operation, a status bar appears at the bottom of the screen to keep you informed of
how the serial number generation process is progressing.
 You can enter a Unit of Measure (UOM) that differs from the default UOM.
 You cannot process serialized items during Transaction Import.
 You can enter prefixes for lot- and serial- controlled items, giving you greater naming flexibility.
86 Inventory

 Inventory items under serial number control must be whole numbers (units); the Inventory module
does not support fractional units. Lots may be received in fractional quantities.
 Lot/Serial Number is enabled only when an item using the Specific Identification valuation
method is selected and Link to Specific Cost Id is selected on Lot/Serial Number Setup
(10.250.01). When Lot/Serial Number is enabled, Specific Cost ID is disabled and automatically
filled in when a lot/serial ID value is selected.

Figure 4: Receipts (10.010.00)

Following are the field descriptions for Receipts (10.010.00).

Batch Number
Batch Number is a code assigned to a transaction batch that uniquely identifies the batch. The
software automatically assigns a different number to each batch created according to the batch
numbering format you establish in IN Setup (10.950.00). This number increments by one (000242,
000243, etc.) for each batch created and cannot be changed. Batch number identification is
important for reporting purposes.

Notes/Attachments (Icon)
Notes/Attachments allows the entry of or attaching a source document regarding the batch. Click the
Notes/Attachments icon to choose to enter either a note or attach source documents. For more
information, see to ―Attaching Notes and Source Documents to Data Items‖ in the Quick Reference
user‘s guide or help.

Period to Post
Period to Post specifies the inventory fiscal period and year to which the batch should be posted. For
example, the entry 08-1999 posts transactions to the eighth period of fiscal year 1999. The default is
the current fiscal period-year. The period to post must belong to a valid fiscal period as specified in GL
Setup (01.950.00). It applies to the entire batch.
 Data Entry Screens 87

Status
Status indicates the current condition of the transaction batch in the system:
 Hold (H) — Not to be released.
 Balanced (B) — Ready for release.
 Completed (C) — Released with no general ledger impact.
 Partially Released (S) — Release has been attempted but failed. Could not be completely released
due to an out-of-balance document or other problem.
 Void (V) — Batch was voided (deleted).
 Unposted (U) — Released for posting to the general ledger but not yet posted.
 Posted (P) — Released and posted to the general ledger.
A batch‘s status changes only as a result of changing its batch handling value (see Batch Handling)
before exiting Receipts (10.010.00) or, in the case of a balanced or partially released batch, upon
accessing Release IN Batches (10.400.00).

Batch Handling
Batch Handling controls the batch management function performed when you complete batch entry.
The batch handling options are:
 Hold — Save the batch for future editing. To obtain the details of a batch on hold, generate the IN
Edit (10.810.00) report.
 Release Later — Set the batch‘s status to Balanced (see Status) to prepare for later release for
posting in Release IN Batches (10.400.00).
 Release Now — Release the batch for posting upon accessing a new or different batch, or on
exiting Receipts (10.010.00). The software runs the Release IN Batches (10.400.00) process
automatically.
 No Action — Leave the current batch status unchanged (see Status).

Quantity Control
Quantity Control is the unit total of all batch items. For example, a batch comprised of three items with
unit quantities of 50, 75, and 30 has a quantity control amount of 155. If a batch‘s quantity control
amount does not equal its quantity total (see Quantity Total), a warning message appears when you
attempt to exit the batch. You can adjust the incorrect amounts, give the batch a Hold status (see
Status) and save it for future editing, or void the batch. Note that the quantity control amount and the
quantity total must be equal before you can release the batch for posting.

Quantity Total
Quantity Total is a running unit total of all transactions entered for the transaction batch. As you enter
the unit value for each transaction, the Quantity Total value increments by the number of units
entered. If a batch‘s quantity control amount (see Quantity Control) does not equal its quantity total, a
warning message appears when you attempt to exit the batch. You can adjust the incorrect amounts,
give the batch a Hold status (see Status) and save it for future editing, or void the batch.

Transfer Number
Transfer Number is an identification number assigned by the software, which is used to track a
transfer transaction through the system.
To display a list of all transfer numbers, press F3 (or double-right-click). InTransit Transfers List is
displayed. To select a transfer number, you can highlight it and click OK or double-click on your
selection.
88 Inventory

Cost Control
Cost Control is the total value of the batch. For example, a batch with items totaling $1,050 has a cost
control amount of $1,050. If a batch‘s cost control amount does not equal its cost total (see Cost
Total), a warning message appears when you attempt to exit the batch. You can adjust the incorrect
amounts, give the batch a Hold status (see Status) and save it for future editing, or void the batch.
Note that the cost control amount and the cost total must be equal before you can release the batch
for posting.

Cost Total
Cost Total is a running amount total of all transactions entered for the batch. As you enter the
transactions, the Cost Total value increments by the extended transaction amount entered. If a
batch‘s cost control amount (see Cost Control) does not equal its cost total, a warning message
appears when you attempt to exit the batch. You can adjust the incorrect amounts, give the batch a
Hold status (see Status) and save it for future editing, or void the batch.

Receipt Number
Receipt Number links the transaction to a source document such as a purchase order. Transactions
are listed with their receipt numbers on these reports:
 IN Transactions (10.680.00)
 Account Distribution (10.690.00)

Receipt Date
Receipt Date specifies when the item is placed in inventory. The receipt date appears with the item on
inventory transaction reports. The default date is the current date.

Inventory ID
Inventory ID associates the transaction with a specific inventory item. The ID entered must be that of
an existing item record. Normally, inventory items are set up in Inventory Items (10.250.00) prior to
transaction entry.
 To display a list of all inventory items, press F3 (or double-right-click). Inventory Item List is
displayed. To select an inventory item, you can highlight it and click OK or double-click on your
selection.
 To enter a new item‘s information on the fly, use the Quick Maintenance feature (see ―Adding or
Changing Possible Values‖ in the Quick Reference Guide for more information).
Enter an inventory stock kit ID here only if:
 You are initializing the initial quantity of a stock kit item.
 You have already created the stock kit records in Kit Assembly (10.050.00).
 You have reduced the quantity of the components comprising the kit to reflect the kit assemblies.
A receipt transaction with a stock kit ID increases the quantity and costs of the stock kit but does not
decrease the quantity and costs of the individual items making up the stock kit.
For a non-stock kit, do not enter its kit ID here. Rather, enter the inventory IDs of its individual
components (items).

Inventory Lookup (Icon)

In form view, clicking the Inventory Lookup icon invokes Inventory Item Lookup (10.210.00),
which allows you to search for an item by description or attribute.
An alternative to clicking the icon is to place the cursor in Inventory ID and press ALT+F3 to invoke
Inventory Item Lookup (10.210.00).
 Data Entry Screens 89

Site ID
Site ID associates the item with a specific inventory storage facility (warehouse, distribution center,
etc.). Note that Site ID is available only if you select Use Multiple Warehouses in IN Setup (10.950.00).
The ID entered in this field must be that of an existing site record. Normally, site IDs are set up in Sites
(10.310.00) prior to transaction entry.
 To display a list of all site IDs, press F3 (or double-right-click). Site List is displayed. To select a
site ID, you can highlight it and click OK or double-click on your selection.
 Assigning a default site ID to an item in Inventory Items (10.250.00) causes that ID to appear in
this field automatically.

Warehouse Bin Location

Warehouse Bin Location associates the item with a specific location (bin, bay, rack, etc.) at the storage
facility (see Site ID).
 To display a list of all locations, press F3 (or double-right-click). Valid Locations List is displayed.
To select a location, you can highlight it and click OK or double-click on your selection.
 Assigning a default warehouse location to an inventory item in Inventory Items (10.250.00)
causes that location to appear in this field automatically.

Quantity
Quantity is the total number of item units received. This quantity appears on reports listing the
transaction.

UOM
UOM is a description of the stocking unit of measure, or basic quantity (each, case, etc.), by which the
item is stocked in inventory. This description appears on reports listing the transaction. The unit
description you enter must be set up in Unit Conversions (10.270.00).
 To display a list of all units of measure, press F3 (or double-right-click). Inventory Unit List is
displayed. To select unit of measure, you can highlight it and click OK or double-click on your
selection.
 Assigning a default unit description to an item in Inventory Items (10.250.00) causes that
description to appear in this field automatically.
Normally the unit description by which an item is received and by which it is stocked is the same. If the
receiving unit is different from the stocking unit, enter the receiving unit description here.

Lot/Serial Number
Lot/Serial Number is enabled only when a Specific Identification valuation item with Link to Specific
Cost Id selected on Lot/Serial Number Setup (10.250.01) is entered on a row. When Lot/Serial
Number is enabled, Specific Cost ID is disabled.
 To display a list of all available lot/serial numbers, press F3 or double-right-click. Available
Lot/Serial Numbers List is displayed. This list includes the quantity available for each lot/serial
number. To select a number, highlight it and click OK or double-click on it.
 For Specific Identification items that are linked to lot/serial numbers, selecting or updating the
lot/serial number in this field will update Specific Cost ID and the lot/serial number displayed on
Lot/Serial Assignment (10.070.00).
 This field displays the lot/serial number of any lot/serial-controlled item that has only a single
lot/serial number associated with the row.
 For lot/serial-controlled items where multiple lot or serial numbers are associated with the row,
this field displays an asterisk (*).
90 Inventory

Specific Cost ID
Specific Cost ID is a user-defined alphanumeric value that identifies a particular cost layer for an item.
This field is enabled only for inventory items that use the Specific Identification valuation method
where Link to Specific Cost Id is not selected on Lot/Serial Number Setup (10.250.01). This field is
disabled and automatically filled in for inventory items that use the Specific Identification valuation
method where Link to Specific Cost Id is selected on Lot/Serial Number Setup (10.250.01) when a
lot/serial number is entered.

Unit Cost
Unit Cost is the per-unit purchase price of the item.
If the item uses the FIFO, LIFO, or Specific Identification valuation methods, the unit cost is the item‘s
per-unit cost the last time it was received. This value is maintained in Last Cost on the Inventory Sites
(10.255.00), Costs tab and Last on the Inventory Items (10.250.00), Cost/Price tab.
If the item uses the Average Cost method, the unit cost is the average per-unit purchase cost of the
item. This value is maintained in Average Cost on Inventory Items (10.250.00). Note that if you enter
the extended amount for an item directly (see Extended Cost), the system will automatically calculate
the unit cost by dividing the extended cost by the quantity entered. If the extended cost of the
transaction is known at the time of entry, having the screen calculate the unit cost is the preferred
method. Calculating the extended cost by multiplying the rounded unit cost by the quantity can cause
a natural rounding variance.
If the item uses the Standard Cost method, the software automatically displays the item‘s standard
unit cost (you cannot change this type of unit cost in this screen) and skips to Extended Cost. The unit
cost for a standard cost item is maintained in Standard Cost on Inventory Sites (10.255.00) and
Inventory Items (10.250.00). If Material Overhead Calculation on IN Setup (10.950.00) is set to When
Received, the standard cost is used. Otherwise, the direct standard cost is used.
If the item uses a user-specified method, the user is expected to enter the unit cost for each
transaction.

Extended Cost
Extended Cost represents the extended amount (quantity times unit cost) of the item. The extended
amount is automatically calculated based on the values at Quantity and Unit Cost. Note that if the item
uses a User-Specified valuation method, no extended transaction amount is displayed and one cannot
be entered. You enter the item‘s extended transaction amount each time its units are sold.

Reason Code
Reason Code is a user-specified code that provides a reason for an inventory adjustment. Reason
codes are defined with associated descriptions in Reason Codes (10.350.00) and appear on the
Reason Codes (10.830.00) report. If a reason code has a default account/subaccount defined, that
account/subaccount is used for the adjustment transaction.
To display a list of all reason codes, press F3 (or double-right-click). Reason Code List is displayed. To
select a code, you can highlight it and click OK or double-click on your selection.

Find Item (button)

Find Item launches Inventory Item Lookup (10.210.00), where you can search for an item by
description or attribute.

Lot / Serial (button)

Click Lot / Serial to display Lot/Serial Assignment (10.070.00), where the software processes the
specific lot or serial number information for an item. This button is active only if the item is lot or serial
numbered and the assignment method is When Received Into Inventory. If you are changing the
transaction quantity of a lot or serial item, Lot/Serial Assignment (10.070.00) is displayed
automatically. See ―Lot/Serial Assignment (10.070.00)‖ on page 121 for more information.
 Data Entry Screens 91

Issues (10.020.00)
Use Issues (10.020.00) to enter batches of sales transactions (invoices, debit memos, or credit
memos) when you sell inventory items. Also use this screen to re-enter information for items sold but
later returned. Transactions entered in this screen automatically update inventory sales totals,
available quantities, and on-hand quantities. Invoices, debit memos, and credit memos can be
entered into Issues (10.020.00) only if the Order Management module is not installed. Inventory sales
totals are updated only for invoices, debit memos, and credit memos.
If Update GL For All Inventory Transactions is selected in IN Setup (10.950.00), financial information
entered in this screen automatically updates the general ledger balance for the accounts receivable
clearing account and subaccount set up in IN Setup (10.950.00) for invoice, debit memo, and credit
memo transaction types. Without that option set, updating these balances requires you to enter
appropriate transactions in General Ledger‘s Journal Transactions (01.010.00).
If the Order Management module is installed, inventory sales transactions are typically entered using
Order Management data entry functions. Use Issues (10.020.00) to enter inventory sales batches only
when Order Management is not installed.
If you wish to issue materials from stock for general use (not to a work order), use Issues (10.020.00)
to perform this function. For example, if cleaning liquid is sold, it is defined as an inventory item so it
can be easily purchased, and it is stocked so that the current quantity on hand can be easily
monitored. Every time a jug of cleaning solution is removed from stock, it can be issued from inventory
to reduce the on-hand quantity. Note that it is not sold via a sales order; it is simply issued for use, and
this reduces the quantity on hand.
If stock needs to be issued from inventory as material received into a work order, then the inventory
items must be issued from within the Work Order module using Material Issues (12.400.00). The Work
Order material issues process performs special tasks to properly move the costs of materials issued to
work orders to the associated WIP accounts. Do not use Inventory‘s Issues (10.020.00) to issue
inventory items to work orders, as this will not properly tie the material issue to a target work order.
If you wish to issue materials from project allocated inventory stock to a project, use Issues
(10.020.00) to perform this function. For example, if cleaning liquid is allocated to a project, it is
defined as an inventory item so it can be easily purchased, and it is stocked so that the current
quantity on hand and quantity available can be easily monitored. Every time a jug of cleaning solution
is used for the project, it can be issued from inventory to reduce the project inventory allocation.
After a transaction batch is released, the software can generate a batch control report that lists all
transactions entered. This report is produced only if you select Automatic Batch Reports in GL Setup
(01.950.00). For each batch released, it is good practice to document the batch information by
generating the IN Edit (10.810.00) report.
The following should be noted:
 All general ledger transactions created in Issues (10.020.00) use real-time transaction dates.
Detail transactions contain the date of the original transaction; summary transactions contain the
date when the batch was released.
 Non-stock items can be issued without specifying a warehouse bin location.
 Issues (10.020.00) can select the correct cost for a returned item using a specific ID valuation.
This feature ensures that a returned item uses the correct cost value rather than the amount paid
for the item most recently.
 When you issue project allocated inventory to a project, the costing behaves as normal, based on
the valuation method assigned to the inventory item in Inventory Items (10.250.00). The cost at
the time of issue may differ from the cost at the time of the project commitment or project
inventory allocation.
92 Inventory

 Lot/Serial Number is enabled only when a Specific Identification valuation method item is
specified and Link to Specific Cost Id is selected on Lot/Serial Number Setup (10.250.01). When
Lot/Serial Number is enabled, Specific Cost ID is disabled and automatically filled in when a
lot/serial ID value is selected.

Figure 5: Issues (10.020.00)

Following are the field descriptions for Issues (10.020.00).

Batch Number
Batch Number is a code assigned to a transaction batch that uniquely identifies the batch. The
software automatically assigns a different number to each batch created according to the batch
numbering format you establish in IN Setup (10.950.00). This number increments by one (000242,
000243, etc.) for each batch created and cannot be changed. Batch number identification is
important for reporting purposes.

Note: The Batch List possible values list, which you can access by clicking in Batch Number and
pressing F3 or double-right-clicking, shows the Journal Type, so you can distinguish issue batches
created in the Work Order module from normal Inventory issue batches.

Notes/Attachments (Icon)
Notes/Attachments allows the entry of or attaching a source document regarding the batch. Click the
Notes/Attachments icon to choose to enter either a note or attach source documents. For more
information, see to ―Attaching Notes and Source Documents to Data Items‖ in the Quick Reference
user‘s guide or help.