Inventory adjustments are used to increase or decrease the on-hand quantity and the cost of inventory items in a branch/plant without conducting a complete physical inventory. The major setup for inventory adjustment is, to set up the processing options for the Inventory Adjustment Application (P4114).
Before you complete the tasks in this recipe, you should verify that the following information is set up:
- Item and branch/plant information in the F4102 and F41021 tables
- GL accounts in the F0901 table
- Processing options for Inventory Adjustment (P4114)
- You can access the processing option of P4112 by accessing the EnterpriseOne Menus | Logistics Management | Inventory Management | Daily Processing | Inventory Master/Transaction and click on the arrow on Adjustments and then click on Values.
- For document type setup, enter a code from UDC 00/DT that specifies the default document type for inventory adjustments. Typically, the default is document type IA (Inventory Adjustments). The system does not enter any default document type.
- Define the primary location as the default location when entering adjustments.
- Specify the version of the journal entries program to use when you access it from the row menu on the Work With Inventory Adjustments form or from the form menu on the Inventory Adjustments form.
- Use the item ledger processing option to determine which version of the Item Ledger Inquiry (CARDEX) program (P4111) the system uses when you access it from the row menu on the Work With Inventory Adjustments form or from the Form menu on the Inventory Adjustments form. If you leave this processing option blank, the system uses version ZJDE0001.
- Specify the version of the Manual Replenishments program (P46100) to use when you access it from the form menu on the Inventory Adjustments form. If you leave the processing option blank, the system will assign version ZJDE0001 automatically.
- Cost entry specifies whether to display the unit cost and extended amount fields on the inventory adjustments form and whether they can be updated. Select a value of 1 to display the fields with default values from the Item Cost Table (F4105) but not allow them to be updated. A value of 2 displays the field; if you leave this processing option blank the system allows you to override cost information.
- A Lot and Layering Fields option determine whether to display the lot information fields on the forms and whether they can be updated. Select a value of 1 to Display and Allow Entry or 2 to Display and Protect the field; if you leave this processing option blank the system does not display the field.
- The adjustment quantity specifies the way the system validates a transaction that results in a negative quantity. Leave this processing option blank. If you select 1 the system allows you to adjust the negative quantity from Available; if you select 2 the system will allow you to adjust the negative quantity from On-hand.
- The Lots on Hold option specifies whether to enable adjustments to lots that are on hold. If the lot status code field on the item/branch plant information form is blank, the lot is not on hold. Leave this processing option blank in order to avoid issuing lots that are on hold.
The Inventory Adjustments Program (P4114) enables you to enter an adjustment for the parent item, although the system does not update quantity information for the components. To adjust inventory, you must enter Transaction, Item, and Lot Information. You can enter adjustment information for each branch/plant in which an item is stored. When you enter a transaction, the system displays a document type, batch number, and document number. Record the document number so that you can locate the transaction later.
You can correct an adjustment that was made in error by entering a Reversing Entry. Because the system records each inventory transaction for accounting purposes, you cannot delete the record. A reversing entry enters a negative quantity and cost amount back into the item information.
You can use the primary location as the default only if all secondary locations have a physical location (for example, aisle and bin). If any of the secondary locations have a blank location or lot, you cannot set the primary location as the default.
The Inventory Adjustments Program (P4114) creates a transaction with a Batch Type of N. This processing option affects journal entries for the F0911 table only. The AAIs (Automatic Accounting Instruction) that are most commonly used are 4122 (Inventory Valuation Account) and 4124 (Expense or Cost of Goods Sold Account). If you use standard costs, the system might create journal entries for the variance, based on AAI 4141. The F4111 table contains entries for each detail line in each adjustment, regardless of how you set this processing option.
Journal entries specify whether detailed or summarized journal entries are created for the general ledger. For summarized journal entries, the system creates a summarized debit total and a summarized credit total by account number for each line in an adjustment. For detailed journal entries, the system creates one journal entry (debit or credit) for each line in an adjustment.
The system changes the unit cost field to zero to enable the zero cost, select the row, and select Zero Cost from the row menu. To disable zero cost, select the row and select Cancel Zero Cost from the row menu for the Extended Amount field to be set to blank. The fields are not available for entry. When you move the cursor to the next row, the program uses the default value in the F4105 table to complete the unit cost and extended amount fields.
You can set up processing options to provide default values and to display cost and lot information. The lot information that appears depends on how you set up duplicate lot processing in System Constants.
- Setting up inventory transactions in Chapter 1,Inventory Management