11 Auditing Outbound Inventory (Release 9.1 Update)

This chapter contains the following topics:

11.1 Understanding Auditing Outbound Inventory

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

11.2 Selecting Items for Outbound Inventory Cycle Count

The following section discusses how to select items for outbound inventory cycle counts.

11.2.1 Understanding Selecting Items for Outbound Inventory Cycle Count

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.

11.2.2 Setting Processing Options for Outbound Inventory Cycle Count - Select Items (R42I50) Program

Processing options enable you to enter the description for the cycle count.

11.2.2.1 Print

1. Print Cycle Count Description

Enter the description to be printed on the Outbound Inventory Cycle Count - Select Items (R42I50) report.

11.2.3 Running the Outbound Inventory Cycle Count - Select Items Program

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.

11.3 Entering Outbound Inventory 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:

Item Number

Enter the item number of the item for which you want to run the cycle count.

Quantity

Enter the quantity that is physically present at the location.

This quantity is represented in the primary unit of measure.

Secondary Quantity

Enter the quantity that is physically present at the location.

This quantity is represented in the secondary unit of measure.

Location

Enter the location where the item is being counted.

Agreement Number

Verify the agreement number for the item.

Action Code (Future Use)

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.

11.4 Verifying Counted Quantity

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:

Item Number

Review the item number for the item being counted.

Count Date

Verify the date when the item was counted.

Primary Quantity On Hand

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.

Primary Quantity Counted

Review the total quantity counted for the item at all locations.

This quantity is represented in the primary unit of measure.

Quantity Variance

Verify the difference of Primary Quantity On Hand and Primary Quantity Counted.

% Quantity Variance

The system displays the percentage variance from the Primary Quantity On Hand.

% Quantity Variance = (Quantity Variance/Primary Quantity On Hand) X 100

Secondary Quantity On Hand

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.

Secondary Quantity Counted

Review the total quantity counted for the item at all locations.

This quantity is represented in the secondary unit of measure.

Secondary Quantity Variance

Verify the difference of Secondary Quantity On Hand and Secondary Quantity Counted.

% Quantity Variance

The system displays the percentage variance from the Secondary Quantity On Hand.

% Secondary Quantity Variance = (Secondary Quantity Variance/Secondary Quantity On Hand) X 100

Amount On Hand

Review the total amount for the on hand quantity at the time of cycle count.

Amount Counted

Review the total amount for the on hand quantity at the time of cycle count.

Amount Variance

Review the difference of Amount On Hand and Amount Counted.

% Amount Variance

The system displays the percentage variance from the Amount On Hand.

% Amount Variance = (Amount Variance/Amount On Hand) X 100

11.5 Printing Variance for Outbound Inventory Cycle Count

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.

11.6 Approving Outbound Inventory 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.

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.

11.7 Correcting Inventory Balances

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)"

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.