Conducting Inventory Counting and Inventory Posting

Inventory Counting is a recurrent activity in every item-based business. Matching the actual items availability and the quantities saved in the system is crucial for inventory management.

Business scenario:

• OEC Computers needs to have an accurate count of the stock physically in the company warehouses.
• The company uses perpetual inventory which tracks the receipt and use of inventory and calculates the quantity value on hand.
• The company wants a physical count of inventory for financial and tax reasons.
• If the physical count reveals any discrepancies from the quantity recorded in the system, the quantity difference is posted.

The Inventory Counting document centralizes the process of recording and managing the inventory count process.

In the Inventory Counting document, you can:

• Freeze items you plan to count so that no inventory movements can take place during the count.
• Set the count to be done by one or multiple stock takers.
• Assign the count to teams or individual users or employees.
• Print a count sheet for the stock takers to fill out.

When the count is complete, you use this document to enter the quantities counted.

There are few options for conducting an inventory counting:

• A single counter.
• Multiple counters:
  • Individual counting - where individual counters conduct independent counting of an item at a storage location for validation purposes. You then compare the counted quantities of each counter and decide which counter result to take.
  • Team counting - where a group of counters' counting results of an item at a storage location add up to its total quantity. The total counted quantities of all team counters is considered as a single counting result.
  • A combination of individual counting and team counting. In this scenario, you can compare the total team counted quantity result to the individual counter result.

In the last step, you handle any quantity differences that the stock takers detect.

You have two main options to handle discrepancies.

• Option 1: Adjust Counted Quantities. If you suspect the stock takers have counted incorrectly, then you can set the item as not counted and do a recount. You can also adjust the counted quantities to the system's in-stock quantities.
• Option 2: Copy to Inventory Posting to document the difference. Choose which items in the document to copy into an Inventory Posting Document. If the stock takers disagree, you can select one of the counts or if they all agree, then you can take the items with no counters' differences.

You can count at the level of the bin location. For warehouses with bin locations, you can:

• Enter bin locations in the Inventory Counting Document.
• Enter quantities at the level of each bin location.
• View in-stock quantities by bin location.

You can count items which are managed by serial numbers and batches.

The system can create new serial numbers or batch numbers if needed. After the count is complete, you can enter draft serial numbers or batches in the Inventory Counting document.

The serial numbers will be created as actual serial numbers during inventory posting.

For example, OEC Computers performed a count for a tablet item. There were 55 tablets in the warehouse, but only 54 had serial numbers. The stock taker entered the quantity in the Inventory Counting document and created a new draft serial number for the additional tablet. The draft became an actual serial number when the counting differences were posted in an Inventory Posting document.

You have the option to count different units of measure.

An individual item may be stored in different units of measure within a warehouse. Because unit of measure groups are set up with relationships between units, the system automatically converts the counted units into the inventory unit of measure.

For example, a company selling paper may store paper in both cartons and in individual packs.

The inventory unit of measure is the pack and there are 24 packs in a carton.

In this situation, let's assume a stock taker counts 10 cartons and 7 individual packs.

The stock taker can enter both the count in cartons and the count in packs.

SAP Business One, Web client will do the conversion of the units and determine the total of 247 packs for the inventory unit of measure.

You have the option to import items and counts into a counting document using the Import from Excel tool.

This option is very useful for companies who have a large number of items and extensive warehouses.

You can import the fields for item codes and descriptions, warehouse codes, bin locations, bar codes, units of measure, batches, serial numbers, and counted quantities.

For more details refer to the user guide: Importing Counting Results from Microsoft Excel https://help.sap.com/docs/SAP_BUSINESS_ONE_WEB_CLIENT/2554bf7e9aa347729b0547a737e123ac/f80ba3baaa4540a5bb33644184bc55bc.html

There are two choices available for the default date for calculating the in-warehouse quantity for inventory counts.

In most circumstances, the best date to use is inventory transactions' creation date.

However, the posting date is another option for businesses who create inventory documents with a posting date that differs from the current date.

This may be useful for companies with large volumes of incoming and outgoing transactions who want to limit the period of time they freeze inventory items.

Here is an example of when using the posting date makes the most sense:

Sometimes the OEC Computers warehouse team cannot keep up with the volume of inventory transactions and delays the entry of a goods receipt or goods issue until the next day.

They receive a shipment with a quantity of 10 on September 6, but do not enter a goods receipt on that day.

Physical inventory is performed on September 7.

On September 8, a goods receipt is created for the quantity of 10. The posting date is set to September 6.

The Inventory Counting document is created on the following day, September 9, with a count date of September 7.

If the default date for in-warehouse quantity is set to the creation date, the system will not include the 10 because the document was not yet created.

If the default date is set to the posting date, then the 10 will be included because the posting date of the transaction was set to September 6.