Inventory counting journal in Dynamics 365 Finance and Operations - Functional consultant series

Effective inventory management is critical for any organization that relies on stock to drive its operations. One of the tools that Dynamics 365 Finance and Operations provides to streamline inventory accuracy is the Inventory Counting Journal. This journal helps businesses ensure their physical stock matches the recorded inventory in the system, minimizing discrepancies and supporting better decision-making.

What is the Inventory Counting Journal?

The Inventory Counting Journal is a tool within Dynamics 365 F&O that allows businesses to conduct physical inventory counts and compare them to the system's records. By identifying discrepancies, organizations can adjust their inventory records to reflect actual stock levels.

This process is essential for:

• Maintaining accurate inventory records.
• Reducing waste or loss due to theft, damage, or mismanagement.
• Ensuring compliance with accounting standards.
• Supporting production and sales planning by providing accurate inventory data.

Steps to create a counting journal

1) Go to inventory management > Setup > Journal Names > Inventory

2) Click the New button, create a journal name, and set the type to "Counting" After saving the record, please keep in mind that the journal type cannot be changed.

3) Go to inventory management > Journal entries > Item counting > Counting

4) Click the New button, then select the Site and Warehouse where stock counting is required. Enabling inventory dimension parameters is optional—if you plan to count inventory based on Site and Warehouse, only enable those parameters. However, if you intend to count stock by batch or serial number, enable the batch or serial parameters accordingly.

5) On the Counting Journal header and lines detail page, you will find the Create lines button, as shown in the figure below.

In the above figure, there are three options available under the "Create lines" dropdown:

1. On-hand: Selecting this option will generate journal lines for items that have available stock.
2. Items: Choosing this option will create journal lines for all items available in the warehouse.
3. Expired batches: Selecting this option will generate journal lines for items with expired batches

So here in this blog, I am going to insert an item manually to correct its physical stock warehouse in the warehouse.

Scenario

Suppose, I have one Item "RMRK_201" available in my Warehouse "P_KRM" and I need to create a physical stock count on this specific Item.

On-hand before counting

6) Now, create a line in the counting journal which we created above.

In the figure above, the system displays an On-hand quantity of 12 available in the ERP system. In the Counted column, you will enter the total stock physically counted in the warehouse. The Quantity column represents the difference between the On-hand and Counted quantities. For instance, a value of 1 in the Quantity column indicates a discrepancy of 1 unit between the system's record and the physical stock available in the warehouse.

7) Post the counting journal.

On-hand after counting

Return to the On-hand list form and refresh it. You will notice that the quantity has increased by 1 unit.

This is the end of this blog.I hope it provided valuable insights into performing stock counting in Dynamics 365 F&O ERP system.

Happy Learning,

Syed Amir Ali.