Defining Serial Number Settings per Item 
You can define whether an item is managed by serial numbers in the item master data record. For example, you can define serial numbers for items that were not previously managed by serial numbers that you now want to manage by serial numbers.
Note
The settings defined per item in the Item Master Data window override the settings defined in the General Settings window.
Note
Items managed by serial numbers must be inventory items. They may not be only sales items or only purchase items, and they may not be defined as phantom items.
Prerequisites
The option to change the method specified in the Managed Item by field is blocked in the application unless all of the following conditions are fulfilled:
The in stock (on hand) quantity of the item must be zero in all of the warehouses
The available quantity of serial numbers created for the item must be zero in all of the warehouses
The available quantity of batch numbers created for the item must be zero in all of the warehouses, and you must meet the following conditions:
There are no open sales orders for this item with allocated batch numbers
There are no open A/R reserve invoices for this item with allocated batch numbers
Procedure
Choose
Inventory 
Items Master Data General 
tab.Choose an existing item or create a new item.
To enable serial numbers for the item, select the Serial Numbers option from the Manage Item by dropdown list.
In the Management Method dropdown list, select one of the following options:
On Every Transaction - you are required to assign serial or batch numbers on every inventory transaction. The Serial Numbers – Setup window opens automatically when you create inventory receipt documents, and the Serial Number Selection window opens automatically when you create inventory issue documents.
On Release Only - you are required to assign serial or batch numbers when you create inventory issue documents only.
The Serial Numbers – Setup window does not open when you create inventory receipt documents.
The Serial Number Selection window opens automatically when you create inventory issue documents.
If you select the Automatic Serial Number Creation on Receipt option SAP Business One creates successive serial numbers automatically on receipt and lets you select these numbers in inventory issue documents. This option is convenient for users that want to enter a large number of documents that contain serial number-managed items, and do not want to create the serial numbers manually when creating inventory receipt documents.
To save the changes, choose the Update button and the OK button.