This chapter contains the following topics:
To correct errors that occur when reporting consumption, you use the auditing process for outbound inventory consumption. You can review quantities details and enter the quantity physically available at your customer's location. A cycle count is the item-based method of counting inventory. You record data such as item numbers, descriptions, and locations on printed inventory count sheets, which you later use to update the online inventory records.
You can use the Outbound Inventory Cycle Count reports to check variances that occurred when reporting consumption and can take measures to correct the errors.
The system calculates and displays the following variances in the reports:
Variance in quantity measured in primary unit of measure
Variance in quantity counted in secondary unit of measure
Variance in amount
The following section discusses how to select items for outbound inventory cycle counts.
Before you start the outbound inventory cycle count process, you must run the Outbound Inventory Cycle Count - Select Items (R42I50) program. The program creates a record for each inventory item to be counted and records the current on-hand quantities for each item. The system then generates the Outbound Inventory Cycle Count - Select Items report, which lets you compare the actual on-hand quantity with the online records.
Processing options enable you to enter the description for the cycle count.
Access the Outbound Inventory Cycle Count - Select Items program.
| Form Name | Form ID | Navigation |
|---|---|---|
| Outbound Inventory Cycle Count - Select Items | R42I50 | Outbound Inventory Periodic Processing (G42I30) menu, Outbound Inventory Cycle Count Select Items. |
After setting up the required processing options, run the Outbound Inventory Cycle Count - Select Items program.
Cycle Count Status 10 identifies that the items have been selected for cycle count.
After selecting the items for outbound inventory cycle count, you must enter the physical counts of the quantity available at the customer location.
Access the Work With Outbound Inventory Cycle Count Entry (P42I20) application.
| Form Name | Form ID | Navigation |
|---|---|---|
| Work With Outbound Inventory Cycle Count Entry | W42I20C | Outbound Inventory Periodic Processing (G42I30) menu, Outbound Inventory Cycle Count.
On the Outbound Inventory Cycle Count Review form, select a cycle count number, and click Cycle Count Entry on the Row menu. |
On the Work With Outbound Inventory Cycle Count Entry form, complete or review the following fields:
Enter the item number of the item for which you want to run the cycle count.
Enter the quantity that is physically present at the location.
This quantity is represented in the primary unit of measure.
Enter the quantity that is physically present at the location.
This quantity is represented in the secondary unit of measure.
Enter the location where the item is being counted.
Verify the agreement number for the item.
Enter a code that specifies the action to be taken after counting the items in physical location.
Cycle Count Status 20 identifies that the items have been counted for cycle count.
After entering physical quantities for cycle count, you can review the variance to check the errors that occurred when reporting consumption.
Access the Work With Outbound Inventory Cycle Count Detail (P42I20) application.
| Form Name | Form ID | Navigation |
|---|---|---|
| Work With Outbound Inventory Cycle Count Entry | W42I20B | Outbound Inventory Periodic Processing (G42I30) menu, Outbound Inventory Cycle Count.
On the Outbound Inventory Cycle Count Review form, select a cycle count number, and click Cycle Count Detail on the Row menu. |
On the Work With Outbound Inventory Cycle Count Detail form, complete or review the following fields:
Review the item number for the item being counted.
Verify the date when the item was counted.
Verify the total quantity on hand for an item at the beginning of the cycle count.
This quantity is represented in the primary unit of measure.
Review the total quantity counted for the item at all locations.
This quantity is represented in the primary unit of measure.
Verify the difference of Primary Quantity On Hand and Primary Quantity Counted.
The system displays the percentage variance from the Primary Quantity On Hand.
% Quantity Variance = (Quantity Variance/Primary Quantity On Hand) X 100
Verify the total quantity on hand for an item at the beginning of the cycle count.
This quantity is represented in the secondary unit of measure.
Review the total quantity counted for the item at all locations.
This quantity is represented in the secondary unit of measure.
Verify the difference of Secondary Quantity On Hand and Secondary Quantity Counted.
The system displays the percentage variance from the Secondary Quantity On Hand.
% Secondary Quantity Variance = (Secondary Quantity Variance/Secondary Quantity On Hand) X 100
Review the total amount for the on hand quantity at the time of cycle count.
Review the total amount for the on hand quantity at the time of cycle count.
Review the difference of Amount On Hand and Amount Counted.
The system displays the percentage variance from the Amount On Hand.
% Amount Variance = (Amount Variance/Amount On Hand) X 100
After completing the cycle count entry process, you can print a variance report to verify the difference between quantities online and quantities present physically.
Access the Outbound Inventory Cycle Count - Print Variance program.
| Form Name | Form ID | Navigation |
|---|---|---|
| Outbound Inventory Cycle Count - Print Variance | R42I60 | Outbound Inventory Periodic Processing (G42I30) menu, Outbound Inventory Cycle Count Print Variance. |
Run the Outbound Inventory Cycle Count - Print Variance program.
Cycle Count Status 30 identifies that the items have been printed for cycle count.
After completing the outbound inventory cycle count process, you must approve the cycle count to mark it complete.
Access the Work With Outbound Inventory Cycle Count Detail (P42I20) application.
| Form Name | Form ID | Navigation |
|---|---|---|
| Work With Outbound Inventory Cycle Count Review | W42I20B | Outbound Inventory Periodic Processing (G42I30) menu, Outbound Inventory Cycle Count. On a grid record, right-click and select Approve Cycle Count. |
Select the cycle count you want to approve. From the Row menu, select Approve Cycle Count.
Cycle Count Status 40 identifies that the cycle count has been approved.
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Note: When you approve an outbound inventory cycle count, the system does not update the inventory values in tables. You must manually make corrections to tables by using the consumption and reverse consumption processes. |
When you run an outbound inventory cycle count, one of the following conditions may be true:
Counted quantity is equal to system quantity
Counted quantity is less than the system quantity
Counted quantity is more than the system quantity
When you approve an outbound inventory cycle count, the system does not automatically correct inventory balances. In each of the three situations, you must manually correct the inventory balances.
Counted quantity is equal to the system quantity
Since there is no difference in the counted quantity and the system quantity, no action is required.
Counted quantity is less than the system quantity
To correct inventory balances when the counted quantity is less than the system quantity, you must report consumption for the difference between counted quantity and system quantity.
See Section 10.2, "Reporting Consumption for Outbound Inventory"
Counted quantity is more than the system quantity
When you report consumption for quantity that is not physically consumed, the counted quantity is more than the system quantity.
To correct inventory balances when the counted quantity is more than the system quantity, you must use the reverse consumption process for the difference between counted quantity and system quantity.
See Section 10.5, "Reversing Consumption (Release 9.1 Update)"
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Note: If you have completed the billing process for quantities for which you are reversing consumption, you must either create a credit order, or cancel the respective billing order. |