Inventory management – Inventory journals

This topic describes how you can use inventory journals to post various types of physical inventory transactions.

The inventory journals in Supply Chain Management are used to post physical inventory transactions of various types, such as the posting of issues and receipts, inventory movements, the creation of bills of materials (BOMs), and the reconciliation of physical inventory. All these inventory journals are used in a similar way, but they are divided into different types.

Types of inventory journals

The following types of inventory journals are available:

  • Movement
  • Inventory adjustment
  • Transfer
  • BOM
  • Item arrival
  • Production input
  • Counting
  • Tag counting

Movement

When you use an inventory movement journal, you can add cost to an item when you add inventory, but you must manually allocate the additional cost to a particular general ledger account by specifying a general ledger offset account when you create the journal. This inventory journal type is useful if you want to overwrite the default posting accounts.

Inventory adjustment

When you use an inventory adjustment journal, you can add cost to an item when you add inventory. The additional cost is automatically posted to a specific general ledger account, based on the setup of the item group posting profile. Use this inventory journal type to update gains and losses to inventory quantities when the item should keep its default general ledger offset account. When you post an inventory adjustment journal, an inventory receipt or issue is posted, the inventory values are changed, and ledger transactions are created.

Transfer

You can use transfer journals to transfer items between stocking locations, batches, or product variants without associating any cost implications. For example, you can transfer items from one warehouse to another warehouse within the same company. When you use a transfer journal, you must specify both the “from” and “to” inventory dimensions (for example, for Site and Warehouse). The on-hand inventory for the defined inventory dimensions is changed accordingly. Inventory transfers reflect the immediate movement of material. In-transit inventory isn’t tracked. If in-transit inventory must be tracked, you should use a transfer order instead. When you post a transfer journal, two inventory transactions are created for each journal line:

  • An inventory issue at the “from” location.
  • An inventory receipt at the “to” location.

BOM

When you report a BOM as finished, you can create a BOM journal. By using a BOM journal, you can post the BOM directly. This posting generates an inventory receipt of the product, together with an associated BOM and an inventory issue of the products that are included in the BOM. This inventory journal type is useful in simple or high-volume production scenarios where routes aren’t required.

Item arrival

You can use the item arrival journal to register the receipt of items (for example, from purchase orders). An item arrival journal can be created as part of arrival management from the Arrival overview page, or you can manually create a journal entry from the Item arrival page. If you enable the item arrival journal name to check for picking locations, Supply Chain Management looks for a location for received items and, if there is room, generates location destinations for the incoming items.

Production input

Production input journals work like the item arrival journals but are used for production orders.

Counting

Counting journals let you correct the current on-hand inventory that is registered for items or groups of items, and then post the actual physical count, so that you can make the adjustments that are required to reconcile the differences. You can associate counting policies with counting groups to help group items that have various characteristics, so that those items can be included in a counting journal. For example, you can set up counting groups to count items that have a specific frequency, or to count items when stock falls to a particular level. For information about how to define counting groups, see Define inventory counting processes.

Tag counting

Tag counting journals are used to assign a numbered tag to a count lot. The tag should contain a tag number, item number, and item quantity. To ensure that a tag is used only one time, and that all tags are used, every item number should have a unique set of tags that has its own number sequence. Three status values can be set for each tag:

  • Used – The item number is counted for this tag.
  • Voided – The item number is voided for this tag.
  • Missing – The item number is missing for this tag.

When you post a tag counting journal, a new counting journal is created, based on the tag counting journal lines. For more information about tag counting, see Inventory tag counting.

Working with journals

A journal can be accessed by only one user at a time. If several users must access journals at the same time to create journal lines, those users must select journals that aren’t currently being used, to prevent information from being overwritten. In situations where multiple departments use the same journal type, it’s helpful to create multiple journal names (for example, one per department). It can also be helpful to divide journals so that each posting routine is entered in its own unique inventory journal. For posting routines that are associated with inventory transactions, create one journal for periodic inventory adjustments and another for inventory counting.

Posting journal lines

You can post the journal lines that you create at any time until you’ve locked an item from additional transactions. The data that you enter in a journal remains in that journal, even if you close the journal without posting the lines.

Data entity support for inventory journals

Data entities support the following types of integration scenarios:

  • Synchronous service (OData)
  • Asynchronous integration

For more information, see Data entities.

Note

Not all inventory journals are OData-enabled, therefore you cannot use the Excel data connector to get data published, updated, and imported back to Supply Chain Management.

Another difference between the journal data entities is the ability to use composite entities that include both the header and line data. Currently, you can use the composite entities for:

  • Inventory adjustment journal
  • Inventory movement journal

These two inventory journals only support the Initialize stock scenario as part of a data management import project:

  • When a journal header number is not specified, but a number sequence is specified for the journal type, the import job will automatically create journal headers per 1000 lines. For example, importing 2020 lines will result in the following three journal headers:
    • Header 1: will contain 1000 lines
    • Header 2: will contain 1000 lines
    • Header 3: will contain 20 lines
  • It is assumed that unique line information exists per inventory dimension, which can be a product, storage, and tracking dimension. Therefore, it’s not possible to import journal lines where only the date field differs on the lines within the same import Project.

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Cash and bank management – Cash flow forecasting

You can use the cash flow forecasting tools to analyze upcoming cash flow and currency requirements, so that you can estimate the company’s future need for cash. To obtain a forecast of the cash flow, you must complete the following tasks:

  • Identify and list all the liquidity accounts. Liquidity accounts are the company’s accounts for cash or cash equivalents.
  • Configure the behavior for forecasts of transactions that affect the company’s liquidity accounts.

After you’ve completed these tasks, you can calculate and analyze forecasts of the cash flow and upcoming currency requirements.

Cash flow forecasting integration

Cash flow forecasting can be integrated with General ledger, Accounts payable, Accounts receivable, Budgeting and inventory management. The forecasting process uses transaction information that is entered in the system, and the calculation process forecasts the expected cash impact of each transaction. The following types of transactions are considered when the cash flow is calculated:

  • Sales orders – Sales orders that aren’t yet invoiced, and that result in physical or financial sales.
  • Purchase orders – Purchase orders that aren’t yet invoiced, and that result in physical or financial purchases.
  • Accounts receivable – Open customer transactions (invoices that aren’t yet paid).
  • Accounts payable – Open vendor transactions (invoices that aren’t yet paid).
  • Ledger transactions – Transactions where it’s specified that a future posting will occur.
  • Budget register entries – Budget register entries that are selected for cash flow forecasts.
  • Demand forecasts – Inventory forecast model lines that are selected for cash flow forecasts.
  • Supply forecasts – Inventory forecast model lines that are selected for cash flow forecasts.

Although there is no direct integration with Project management and accounting, there are several ways to include project transactions in the cash flow forecast. Posted project invoices are included in the forecast as part of open customer transactions. Project-initiated sales orders and purchase orders are included in the forecast as open orders after they are entered in the system. You can also transfer project forecasts to a ledger budget model. This ledger budget model is then included in the cash flow forecast as part of the budget register entries.

Configuration

To configure the cash flow forecasting process, use the Cash flow forecast setup page. On this page, you specify the liquidity accounts to track and the default forecasting behaviors for each area.

General ledger

You must first define the liquidity accounts to track through cash flow forecasting. Typically, these liquidity accounts are main accounts that are associated with the bank accounts that will receive and disburse cash. On the Cash flow forecast setup page, on the General ledger tab, select the main accounts to include for forecasting. If a bank account has been associated with the main account on the Bank account page, it’s shown in the Bank account field.

You can set up a dependent cash flow forecast for a main account that contains transactions that are directly related to transactions in another main account. Each line that you add in the In the Dependent accounts section creates a cash flow forecast amount in a dependent main account. This amount is a percentage of the cash flow amounts to the primary main account that you selected.

First, set the Main account field to the primary main account where transactions are expected to initially occur. Set the Dependent main account field to the account that will be affected by the initial transaction against the primary main account. Set appropriate values for the other fields on the line. You can change the value in the Percent field to reflect the effect of the primary main account on the dependent main account. For a sales or purchase forecast, select a Terms of payment value that is typical for most customers or vendors. Set the Posting type field to the expected posting type that is related to the cash flow forecast.

Accounts payable

You can calculate the forecast for purchases by using the setup options on the Accounts payable tab of the Cash flow forecast setup page. Before you can configure cash flow forecasting for Accounts payable, you must configure terms of payment, vendor groups, and vendor posting profiles.

In the Purchasing forecast defaults section, you can select default purchasing behaviors for cash flow forecasting. Three fields determine the time of the cash impact: Time between delivery date and invoice date, Terms of payment, and Time between invoice due date and payment date. The forecast will use the default setting for the Terms of payment field only if a value isn’t specified on the transaction. Use a term of payment to describe the most typical number of days for each part of the process.

The Liquidity accounts for payments field specifies the liquidity account that is most often used for payments. Use the Percentage of amount to allocate to cash flow forecast field to specify whether a percentage of amounts should be used during forecasting. Leave this field blank if the full transaction amounts should be used during forecasting.

You can override the default setting for the Time between invoice due date and payment date field for specific vendor groups. The forecast will use the default value from the Purchasing forecast defaults section unless a different value is specified for the vendor group that is related to the vendor on the transaction. To override the default value, select a vendor group, and then set the new value for the Purchasing time field.

You can override the default setting for the Liquidity account field for specific vendor posting profiles. The forecast will use the default value from the Purchasing forecast defaults section unless a different liquidity account is specified for the posting profile that is related to the vendor on the transaction. To override the default value, select a posting profile, and then specify the liquidity account that is expected to be affected.

Accounts receivable

You can calculate the forecast for sales by using the setup options on the Accounts receivable tab of the Cash flow forecast setup page. Before you can configure cash flow forecasting for the Accounts receivable, you must configure terms of payment, customer groups, and customer posting profiles.

In the Sales forecast defaults section, you can select default sales behaviors for cash flow forecasting. Three fields determine the time of the cash impact: Time between shipping date and invoice date, Terms of payment, and Time between invoice due date and payment date. The forecast will use the default setting for the Terms of payment field only if a value isn’t specified on the transaction. Use a term of payment to describe the most typical number of days for each part of the process.

The Liquidity accounts for payments field specifies the liquidity account that is most often used for payments. Use the Percentage of amount to allocate to cash flow forecast field to specify whether a percentage of amounts should be used during forecasting. Leave this field blank if the full transaction amounts should be used during forecasting.

You can override the default setting for the Time between invoice due date and payment date field for specific customer groups. The forecast will use the default value from the Sales forecast defaults section unless a different value is specified for the customer group that is related to the customer on the transaction. To override the default value, select a customer group, and then set the new value for the Sales time field.

You can override the default setting for the Liquidity account field for specific customer posting profiles. The forecast will use the default value from the Sales forecast defaults section unless a different liquidity account is specified for the posting profile that is related to the customer on the transaction. To override the default value, select a posting profile, and then set the liquidity account that is expected to be affected.

Budgeting

Budgets that are created from budget models can be included in cash flow forecasts. On the Budgeting tab of the Cash flow forecast setup page, select the budget models to include in the forecast. By default, new budget register entries are included in forecasts after the budget model has been enabled for cash flow forecasting. Inclusion in cash flow forecasting can be overwritten on individual budget register entries.

Inventory management

Inventory supply and demand forecasts can be included in cash flow forecasts. On the Inventory management tab of the Cash flow forecast setup page, select the forecast model to include in the cash flow forecast. Inclusion in cash flow forecasting can be overwritten on individual supply and demand forecast lines.

Calculation

Before you can view cash flow forecasting analytics, you must run the cash flow calculation process. The calculation process will project the future cash impacts of transactions that have been entered.

Calculate the cash flow forecast by using the Calculate cash flow forecasts page. You can calculate either the full cash flow forecast or an incremental cash flow forecast.

  • To clear all cash flow forecast transactions and recalculate, set the Cash flow forecast calculation method field to Total. We recommend that you use this approach if you haven’t updated the cash flow forecasts for a long time.
  • To update the existing cash flow information for new transactions only, set the Cash flow forecast calculation method field to New. The page will show the date when your cash flow calculation was last run.

You can also use batch processing for your cash flow forecasting. To help guarantee that your forecasting analytics are regularly updated, set up a recurring batch process for cash flow forecast calculation.

Reporting

After the cash flow forecast is calculated, you must refresh the associated entity information for analytical reporting. On the Entity store page, select the LedgerCovLiquidityMeasurement aggregate measurement, and then click Refresh.

There are two workspaces that contain cash flow forecasting data. One workspace has data for all companies, and the other workspace has data only for the current company.

Access to the workspace for all companies is controlled through the View cash flow all companies workspace duty. By default, the Cash overview – all companies workspace is available to the following roles:

  • Chief executive officer
  • Chief financial officer
  • Financial controller

Access to the workspace for the current company is controlled through the View cash flow current company workspace duty. By default, the Cash overview – current company workspace is available to the following roles:

  • Accountant
  • Accounting manager
  • Accounting supervisor
  • Accounts payable manager
  • Accounts receivable manager

The Cash overview – all companies workspace shows cash flow forecasting analytics in the system currency. The system currency and the system exchange rate type that are used for the analytics are defined on the System parameters page. This workspace shows an overview of cash flow forecasting and bank account balances for all companies. A chart of cash inflows and outflows gives an overview of future cash movements and balances in the system currency, together with detailed information about the forecasted transactions. You can also see the forecasted currency balances.

The Cash overview – current company workspace shows cash flow forecasting analytics in the company’s defined accounting currency. The accounting currency that is used for the analytics is defined on the Ledger page. This workspace shows an overview of cash flow forecasting and bank account balances for the current company. A chart of cash inflows and outflows gives an overview of future cash movements and balances in the accounting currency, together with detailed information about the forecasted transactions. You can also see the forecasted currency balances.

For more information about the cash flow forecasting analytics, see the Cash overview Power BI content topic.

Additionally, you can view cash flow forecasting data for specific accounts, orders, and items on the following pages:

  • Trial balance: Select Cash flow forecasts to view the future cash flows for the selected main account.
  • All sales orders: On the Invoice tab, select Cash flow forecasts to view the forecasted cash impact of the selected sales order.
  • All purchase orders: On the Invoice tab, select Cash flow forecasts to view the forecasted cash impact of the selected purchase order.
  • Supply forecast: Select Cash flow forecasts to view the future cash flows that are associated with the selected item supply forecast.
  • Demand forecast: Select Cash flow forecasts to view the future cash flows that are associated with the selected item demand forecast.

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Inventory management – Set up an item arrival overview profile

This topic focuses on the setup of an arrival overview profile. The arrival overview profile is a collection of rules that will be applied when the Arrival overview page is opened by a user. You can use this procedure in demo data company USMF. This procedure would typically be carried out by a receiving clerk.

  1. In the navigation pane, go to Modules > Inventory management > Setup > Distribution > Arrival overview profiles.
  2. Select New. Because you will almost always work in the same warehouse offloading full truck loads, you should create an arrival overview profile to simplify the process of registering received items.
  3. In the Arrival overview profile name field, type a value.
  4. In the Show lines field, select an option. Select which lines to show for the receipts:
    • All – Show all lines, regardless of status.
    • In progress – Show lines for receipts in which the progress is Complete or Partly. This means that for each line, either the full quantity or part of the quantity has been registered in an arrival journal.
    • Not complete – Show lines for receipts in which the progress is None or Partly. This means that for each line, nothing or only part of the quantity has been registered in an arrival journal.
  5. Expand or collapse the Arrival options section.
  6. In the Days forward field, type a value. This sets a filter to show the receipt lines expected to be received within the next few days (depending on the number you set).
  7. In the Days back field, type a value. This sets a filter to show the receipt lines expected to be received a number of days before today.
  8. In the Warehouses field, type a value. Filter on one or more warehouses.
  9. In the Mode of delivery field, select a value. This sets a filter to show only the receipt lines with this Mode of delivery.
  10. In the Name field, select WHS.
  11. In the Warehouse field, select warehouse 24. This is the default warehouse that will be used for registered receipt lines that use this profile.
  12. In the Location field, select Baydoor. This is the default location that will be used for registered receipt lines that use this profile.
  13. Expand or collapse the Arrival query details section.
  14. In the Restrict to site field, select site 2. This sets a filter to show only the receipt lines with this site.
  15. Set the Purchase orders option to Yes. Select receipt lines from purchase orders.
  16. Set the Transfer orders option to Yes. Select receipt lines from transfer orders.
  17. Select Save.
  18. Close the page.

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