Inventory Adjustment with Directed Pick/Put-Away

Inventory Adjustment with Directed Pick/Put-Away

Managing inventory adjustments in Microsoft Dynamics 365 Business Central can be straightforward when posting documents like shipments or receipts, as the system automatically keeps the item ledger and warehouse entry tables in balance. However, when using Directed Pick/Put-Away, the process becomes more complex, especially when it involves making inventory adjustments. In this blog, we’ll explore how to calculate warehouse adjustments using directed pick/put-away and explain why this process is necessary.

In Business Central, Directed Pick/Put-Away is a sophisticated warehouse management setup that allows for more controlled and detailed management of inventory movements within the warehouse. However, when you make an inventory adjustment under this setup, things work differently compared to standard inventory adjustments.

Key Points:

• Standard Posting: For typical transactions like shipments and receipts, Business Central automatically balances entries in the item ledger and warehouse entry tables.
• Directed Pick/Put-Away Posting: When using directed pick/put-away, and you need to make an inventory adjustment, you can’t just use the item journal. Instead, you use the warehouse item journal, which posts ONLY to the warehouse entry table, not the item ledger.

This discrepancy creates a temporary imbalance where the item ledger and warehouse entry tables don’t match, leaving a quantity in the “adjustment bin.”

To resolve the imbalance, Business Central requires a two-step process to align the item ledger with the warehouse entries:

1. Step 1: Post the Warehouse item Journal

   • The warehouse item journal is used to adjust quantities in the warehouse.
   • Posting this journal updates the warehouse entry table but does not affect the item ledger.
   • After posting, you will notice a quantity discrepancy in the "adjustment bin," representing the mismatch between the warehouse and item ledger entries.

2. Step 2: Use the Item Journal to Calculate Warehouse Adjustment

   • After posting the warehouse item journal, you must manually adjust the item ledger to match the warehouse entries.
   • Navigate to the Item Journal and go to the Functions menu at the bottom, where you will find the option "Calculate Warehouse Adjustment...".
   • This function automatically creates an entry in the item journal for the differences between the item ledger and warehouse entry table, based on the data in the “adjustment bin.”
   • Once the item journal entry is posted, the item ledger and warehouse entry table are balanced again, and the "adjustment bin" quantity returns to zero.

While the two-step process for inventory adjustments in Business Central with directed pick/put-away may seem overly complex, it serves to maintain a high level of control and accuracy in inventory and financial management. Understanding the steps and knowing how to navigate the system can alleviate some of the frustration associated with these manual adjustments.