5/29/2020 Document 2319872.

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What Is The Difference Between 'Allow Negative Balances' And 'Allow Negative On-Hand
Transactions' In Manage Inventory Organization Parameter (Doc ID 2319872.1)

In this Document

Goal
Solution

APPLIES TO:

Oracle Fusion Inventory Management Cloud Service - Version 11.1.4.0.0 and later
Oracle Fusion Inventory Management - Version 11.1.4.0.0 and later
Information in this document applies to any platform.

GOAL

What is the difference between 'Allow negative balances' and 'Allow negative on-hand transactions' in Manage Inventory
Organization Parameter?

How do they both differ?

SOLUTION

Allow Negative Balances

Indicates whether to allow negative balances.

This parameter determines if inventory transactions can drive the inventory balance of an item negative.

Allow Negative On-hand Transactions

Indicates whether during the Cycle Counting the negative onhand transactions will be allowed.

If the customer is familiar with EBS, this latter choice replaces the profile option in EBS named "INV: Allow Count Adjustments
to Drive Onhand Negative".

Example:

Say you have a count sequence to count for Item A. System quantity says there's 100 in inventory. The user enters a count of
90. The count sequence is set to be approved.

No adjustment at this point. So in theory if the adjustment was to be made now, the inventory would be adjusted to 90. But
since the adjustment hasn't been transacted yet, the inventory balance is still 100.

In the mean time a transaction is processed for this item. I.E. users are performing transactions on the same items that are
being cycle counted.

Could be a Sales Order, Transfer Order, Misc Issue etc.

The user issues qty 105 to a Sales Order. The Inventory balance is now -5. (Providing "Allow Negative Balance") parameter is
enabled.

Next, the Count sequence for 90 gets approved creating a negative transaction of -10.

Total On-Hand qty gets adjusted to -15.

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5/29/2020 Document 2319872.1

This is how a cycle count adjustment can drive inventory negative.

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