SAP PHYSICAL INVENTORY PROCESS IN NUTSHELL:

What is Physical Inventory?

Physical inventory is a process of determining that the inventory quantities are exact, or if there are differences in quantity mentioned physically present and that mentioned in the SAP system. Basically, after you are finished with physical inventory, your system and physical stock levels must be the same.

It is mandatory for legal reasons, and in the most of the times it is conducted once a year.

To simplify the process, check the below diagram, these are the most common steps for doing physical inventory (not only in SAP ERP).

#.Types Of Physical Inventory

The following physical inventory procedures can be used in SAP system:

• Periodic inventory
• Continuous inventory
• Cycle counting
• Inventory sampling

Periodic inventory:

?Most of the time companies use this kind of inventory. In most cases, it is done once a year, and this kind of inventory is called annual physical inventory. That means that material stock is counted once a year.

Most of the times at the end of the year or after the season ends (in seasonal industries).

Continuous inventory?

All materials are counted at some point in the year, but that can be at any day appointed for. So we can count some material in February, others in April and so on.

A single material can be counted on a single date. This type of inventory is mainly utilized in warehouse management based warehouses, but it can be done in inventory management too.

Cycle counting:

?This type of inventory allows us to set a period for regular intervals for physical inventory on the material level. So a fast moving and high value material can be counted four times a year while slow moving and low value material can be counted once a year.

The indicator for this is set in material master in the Plant/Storage Location 1 View, in the field

CC phys. Inv. Ind.?Inventory sampling:?

Only a number of randomly selected materials are counted on the balance sheet key date, and if those materials show small enough differences, the other materials can also be considered to have a correct stock levels.

Not really used that often, as it is essentially an approximation, but in some cases it can be used if material and warehouse structure imply that.

#. The following diagram show how SAP inventory process sequence with relevant transaction codes:

#. SAP Physical Inventory Transaction Codes:

SAP Transaction Codes for Physical Inventory the most relevant and popular TCodes.

MI01???Create physical inventory Document

MI02???Change physical inventory Document

MI21???Print physical inventory document

MI24???physical inventory List

MI03???Display physical inventory Document

MI11???Recount physical inventory Document

MIDO?physical inventory Overview

MI04???Enter inventory Count with Document

MI07???Process List of Differences

MI31???Batch Input: Create Phys. Inv. Doc.

MI10???Create List of Differences w/o Doc.

MI20???Print List of Differences

MIGO?Goods Movement

MMBE Stock Overview

MB51?Material Doc. List

MICN??Batch Inpt:Ph.Inv.Docs.for Cycle Ctng

MI09???Enter inventory Count w/o Document

MI22???Display Phys. Inv. Docs. f. Material

MI08???Create List of Differences with Doc.

MB5B?Stocks for Posting Date

OINM?Object Link Medium

MB52?List of Warehouse Stocks on Hand

S_ALR_87011979??physical inventory List

WSTI??SAP Retail Store: physical inventory

S_ALR_87011980??physical inventory List

MIMD?Transfer PDC physical inventory Data

MI00???physical inventory

S_ALR_87011981??physical inventory List

LI21????Clear inventory Differences in MM-IM

LI20????Clear inventory Differences WM