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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Reverse a product rece...
Finance | Project Operations, Human Resources, ...
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Reverse a product receipt which is linked to Item requirement and Project Item Journal

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Posted on by MYGz 2,234
Hello,
I am trying to understand that if we use Item Requirement for a project, then do we need to additionally create Project Item Journal for that project?
Or the consumption of Items will happen through Item Requirement Packing Slip?
If Item requirement is getting created and we are also posting Project Item Journal separately, will that count as consuming the item 2 times?
 
In that context,
I have a Received Purchase Order where Project Item Journal is posted for the Product Receipt Quantity. Now I want to reverse the Product Receipt. So I posted a reverse Project Item journal with -ve sign. But when I reverse the product receipt I'm getting error, "Quantity is already returned".
 
What is the correct approach to cancel the product receipt in this case? Is it possible to cancel the product receipt because the Quantity is already consumed in the Project Item Journal. In the other thread, I read that once you have consumed the item, system won't allow to cancel product receipt. Even though I tried to return the LOT ID with Adjustment Journal which was consumed with Project Item Journal.
 
How to deal with Item requirement, Product Receipt and Project Item Journal to keep things in sync.
Categories:
Dynamics 365 Finance
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  • Suggested answer
    Holly Huffman Profile Picture
    Holly Huffman 6,538 Super User 2025 Season 2 on at
    Hi there! Good morning, evening, or afternoon - depending on where you are :) Hope you are well today! 
     
    This is a common challenge when working with Item Requirements, Product Receipts, and Project Item Journals in Dynamics 365 Finance and Operations. Here's a detailed explanation and guidance to address your concerns:
    1. Understanding Item Requirement and Project Item Journal
    • Item Requirement: When you create an Item Requirement for a project, it is used to track the consumption of items for that project. Posting a Packing Slip (Product Receipt) against the Item Requirement automatically consumes the items for the project.
    • Project Item Journal: This is another way to consume items for a project. If you post both an Item Requirement Packing Slip and a Project Item Journal for the same quantity, it will result in double consumption of the items.
    Key Point: You do not need to create a Project Item Journal if you are already using Item Requirements to consume items. The Item Requirement Packing Slip handles the consumption.
    2. Why the Error Occurs
    • When you try to reverse the Product Receipt, the system checks if the quantity has already been consumed. Since the quantity is consumed through the Project Item Journal, the system prevents the reversal, showing the error: "Quantity is already returned."
    • Even if you attempt to reverse the consumption using a negative Project Item Journal, the system still considers the quantity as consumed, which blocks the Product Receipt reversal.
    3. Correct Approach to Cancel the Product Receipt
    To cancel the Product Receipt in this scenario, follow these steps:
    a. Reverse the Project Item Journal
    • Post a negative Project Item Journal to reverse the consumption. Ensure that the reversal matches the exact quantity consumed in the original journal.
    b. Reverse the Item Requirement Packing Slip
    • Once the Project Item Journal is reversed, you can proceed to reverse the Packing Slip (Product Receipt) linked to the Item Requirement.
    • Navigate to Procurement and Sourcing > Purchase Orders > All Purchase Orders.
    • Select the relevant Purchase Order and use the Cancel Product Receipt function.
    c. Reconcile the Inventory
    • If there are discrepancies in inventory due to previous adjustments (e.g., LOT ID adjustments), use an Inventory Adjustment Journal to correct the stock levels.
    4. Best Practices to Avoid Double Consumption
    • Use Only One Method: Either use Item Requirements or Project Item Journals for consumption, but not both.
    • Enable System Controls: Configure the system to prevent double consumption by ensuring that Item Requirements and Project Item Journals are not used simultaneously for the same items.
    • Train Users: Educate users on the correct process for handling Item Requirements and Project Item Journals to avoid conflicts.
    5. New Feature for Product Receipt Cancellation
    • If you are using a recent version of Dynamics 365, check if the "Enable purchase order product receipt cancellation with linked item requirements" feature is available and enabled. This feature simplifies the process of canceling Product Receipts linked to Item Requirements.
  • Suggested answer
    Saif Ali Sabri Profile Picture
    Saif Ali Sabri 2,352 Super User 2025 Season 2 on at
    Managing Item Requirement, Product Receipt & Project Item Journal
    1. Understanding Consumption:
      • If you use Item Requirement, you do not need a separate Project Item Journal for consumption.
      • Consumption happens automatically when you post the Packing Slip (Product Receipt) for Item Requirement.
      • Posting a Project Item Journal separately will result in double consumption, as both transactions reduce inventory.
    2. Reversing a Product Receipt:
      • Since the Project Item Journal has been posted, the item is already consumed, preventing direct reversal.
      • Even if you use an Adjustment Journal to return the lot, the system still tracks the original consumption.
    3. Correct Approach to Reverse the Product Receipt:
      • Reverse the Project Item Journal first (as you did with a negative entry).
      • Use a Return Purchase Order (PO return process) instead of directly reversing the Product Receipt.
      • If the PO is still open, cancel the original Item Requirement Packing Slip via Credit Note (Vendor Return).
    Key Takeaways:
    • Use either Item Requirement or Project Item Journal for consumption, not both.
    • Once consumed via Project Item Journal, the system prevents Product Receipt reversal.
    • Always reverse consumption first before attempting to cancel the receipt.
    • Consider using a Return PO for corrections instead of direct reversals.
  • Vahid Ghafarpour Profile Picture
    Vahid Ghafarpour 12,202 Super User 2025 Season 2 on at
    If any of the responses helped resolve your issue, please take a moment to mark the best answer. This helps others in the community quickly find solutions to similar problems.

    To do this, simply click the "Does this answer your question?" button on the most helpful response and like the helpful posts. If your issue is still unresolved, feel free to provide more details so the community can assist further!

    Thanks for being an active part of the Dynamics 365 Community! 😊

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