Physical Inventory: Differences
Use
Once the results of the count have been entered in the system, the differences are determined by the system via a difference list. The system compares the book value at the time of the count with the results of the count and calculates the differences.
If there is a long period of time between physical counting and entering of the results in a physical inventory document, you can "capture" (fix) the book balance in the physical inventory document immediately before the physical count has taken place. This enables you to prevent differences being distorted by a goods issue that is posted, for example, in the period between the counting and entering of results in the system.
If you trace the differences back to a counting error, you can initiate a recount for the items in question.
The actual differences are posted per document. In doing so, you can process a complete document. Alternatively, you can elect to adjust the differences only for certain items in a document. When differences are adjusted, the system always adjusts both values and quantities.
When physical inventory is carried out and Warehouse Management is active, two steps are necessary to adjust the differences. First only the variant quantities are corrected in the storage bins of the storage type. Valuation is not affected. The differences then have to be posted in Inventory Management for the relevant site and storage location. How this is done is described below:
Features
Quantity Correction
The difference posting leads to a correction of the stock quantity. The current stock level as per the book value is replaced by the quantity actually counted. Similar to the document created at goods receipt, the system creates an article document. This contains movement types defined especially for physical inventory postings to enable the stock quantity to be corrected
Value Correction
In addition to correcting the quantity, the system also corrects the value of the stock. The difference quantity determined is valuated at the moving average price of the article. Depending on the type of difference, the amount is posted as an inward or outward movement to the relevant stock account in Financial Accounting. The offsetting entry is normally posted to the "expenses from inventory differences" or "revenue from inventory differences" account. An accounting document is therefore created in addition to the article document.
No value correction is necessary if the stock is non-valuated (for example, vendor consignment stock). No accounting document is created.
Tolerances
Value tolerances can be defined for a group of users who post inventory differences. You can, for example, define the following types of tolerances:
If a document exceeds the document tolerance limits defined for the user group, the user is unable to post the physical inventory differences. If the total value of the document is below the document tolerance limit, but some items in the document exceed the maximum amount defined per item, the user is unable to post the differences for the item. The user can still, however, process the remaining items.
Example
The following example illustrates how physical inventory documents and follow-on documents are connected: By posting the difference quantities, an article document (quantities correction) and an accountings document (value correction) are also generated for the physical inventory document.
Physical inventory document 10001234
Item |
Article |
Moving average price |
Book quantity |
Qty counted |
Difference quantity |
Difference value |
1 |
500004711 |
$1.49 each |
100 |
95 |
5- |
7,45 |
Article document 4900009876
Item |
Article |
Quantity |
Site |
Storage location |
Movement type |
+/- sign |
1 |
500004711 |
5 |
0001 |
0001 |
702 |
- (Outward movement) |
Accounting document 4900007564
Item |
Account |
Debit |
Credit |
1 |
Stock of electrical goods |
7,45 | |
2 |
Expenditure from physical inventory differences |
7,45 |