Understanding Inventory Adjustments

You can enter adjustments to increase or decrease the on-hand quantity and the cost of inventory items in a branch/plant without conducting a complete physical inventory. For example, you can adjust inventory when a discrepancy exists between the number of items that are recorded for a location and the actual count.

If you are using lot processing, you can use adjustments to add lots into inventory and to place them on hold, or to override the effective date or expiration date. You can also provide a country of origin for that lot when you create it. If you are working with a kit, you typically add the entire kit into inventory by entering an adjustment for each component. The Inventory Adjustments (P4114) program enables you to enter an adjustment for the parent item, although the system does not update quantity information for the components.

If the branch/plant has license plates functionality activated, you use the processing options on the Warehouse tab, and license plate branch/plant constants, to process license plate information for addition of inventory to the location.

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. A reversing entry enters a negative quantity and cost amount back into the item information. Because the system records each inventory transaction for accounting purposes, you cannot delete the record.

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 on the System Constants form.