Inventory

Items and Warehouses

SAP Business One enables you to manage all the items that you
purchase, manufacture, sell, or keep in stock. Services, such as labor, can
also be defined as items. This can be useful for defined services you sell on a
regular basis. Items can also be used to describe fixed assets that are
tracked for accounting purposes.
 

For each item, enter the data relevant for a particular area in the
system. This data is used automatically by the system for purchasing, sales,
production, managing your warehouse, and accounting. SAP Business One,
therefore, provides optimum support for your business processes.
 

Using the item data in the system, you can optimize your stock. You
have complete control over stock quantities at all times and can also analyze
the financial aspects of stockholding at the same time. In SAP Business One,
there is a direct relationship between warehouses and items.
 

      Defining a warehouse
Choose (1) Administration > (2) Setup > (3) Inventory > (4) Warehouses to define
new warehouses.

Here, you can enter a Warehouse code and a Warehouse name.

 
Address Fields: Specifies address details for the warehouse. This address
defaults into the purchasing document for the ship-to address for the
warehouse.
 
Location: Specifies the warehouse location. Use this field to classify
warehouses according to their physical location.
 
Drop Ship: Defines the warehouse as a drop-ship warehouse. Use this option
when the company does not manage inventory for specific items, but receives
commission for every order. SAP Business One will not calculate stock
postings for this warehouse.
 
In the Accounting tab, you define various default accounts used for inventory
management per warehouse. To define a warehouse as a default in the MRP
wizard, select the Nettable checkbox. If unchecked, the warehouse can still be
chosen in MRP, but does not appear as default. Stock Change – Marketing
Documents

Inventory Transactions
When an item is purchased or sold, warehouse inventory is automatically reduced or
increased when the transactions are entered in purchasing and sales. For example, if a
delivery note is created based on a sales order for a customer, the warehouse stock is
reduced by the delivery quantity when the delivery note is added. If an incoming invoice
is entered in purchasing, the warehouse stock increases by the delivery quantity when
the incoming invoice is added.
The purchase or sale of an item is, however, not the only transactions
that result in a goods receipt or goods issue. For example, if five pieces of an
item are found damaged in the warehouse as a result of water damage,
rendering them useless, they are removed from the warehouse. These items
cannot, however, be sold because they are now useless. In this case, you
have to post a separate goods issue with the function described here.
 
 A goods receipt may be necessary, for example, if, after carrying out a
physical inventory, you establish that you have not considered part of the
quantity stored. You enter the forgotten quantity by means of a goods receipt
in the system.
 

Goods Receipt and Goods Issue

For goods receipts and goods issues that do not refer to a sales
process or purchasing process, you must specify the warehouse to which or
from which you want to post the goods. The system always uses the default
warehouse from the item master record if you do not specify otherwise.
A goods receipt creates a journal entry that posts the value of the received
goods on the debit side of the stock account and the credit side of the
inventory offset – increase account. You can use the Goods Receipt if there is
an increase in the quantity of inventory outside the regular purchase and
sales process (e.g., Samples or freebies from Suppliers) or if you are
reconciling the system inventory count and physical inventory count (e.g.
Physical inventory count is higher than the system inventory count).
 

To post a goods receipt: e.g. The company received 2 A00001 from its

suppliers as freebies due to recent bulk purchase.
 

Go to (1) Inventory → (2) Inventory Transactions → (3) Goods Receipt.

4. On the Item No. field, click the selection list (picker’s list) button. Select
5. Input ‘2’ on the Quantity
6. In the Remarks field, put ‘Freebies from Suppliers’
7. Add.

A goods issue creates a journal entry that posts the value of the
issued goods on the debit side of the inventory offset – decrease account and
the credit side of the stock account. The stock accounts are retrieved from the
Inventory Account fields on the Inventory Data tab of the item master record.
 
You can use the Goods Issue if there is a decrease in the quantity of
inventory outside the regular purchase and sales process (e.g., Theft in the
warehouse, flood/fire damaging warehouse goods) or if you are reconciling
the system inventory count and physical inventory count (e.g. Physical
inventory count is lower than the system inventory count).
 
To post a goods issue: e.g. The warehouse manager recently discovered a
theft in the warehouse with 5, A00001 items missing. To record the missing
items:
 
Go to (1) Inventory → (2) Inventory Transactions → (3) Goods Issue
4. On the Item No. field, click the selection list (picker’s list) button. Select
5. Input ‘5’ on the Quantity
6. In the Remarks field, put ‘Warehouse theft’
7. Add.

Inventory Transfer
When you post an inventory transfer from warehouse 02 to warehouse
01, the system creates an inventory transfer document and a journal
entry. The journal entry posts the value of the transferred goods on the debit
side of the stock account of warehouse 01 and on the credit side of the
inventory account of warehouse 02.
 
To post a stock transfer: e.g. The current branch wanted transfer 5 pcs of
A00001 from Warehouse 1 to Warehouse 2.
 

Go to (1) Inventory → (2) Inventory Transactions → (3) Inventory Transfer.

                    4. Input the following information: Item No: A00001
To Warehouse: 01
From Warehouse: 02
Quantity: 5
                     5. Click Add.

Inventory Management
 

By Serial Numbers
Serial numbers can help you track items down to the level of each
individual object in your warehouse, so you know exactly which one was sold
to a customer. The typical criteria for determining if an item needs a serial
number are:
 
 Is the item a high value item?
 Should the item be tracked for security or repair reasons?

Serial numbers are also important in Service. A serialized item can be set
up to automatically create a customer equipment card and a service contract
when the item is delivered to a customer. The customer equipment card is
used to store service information, such as valid service contracts, any service
calls, and inventory transactions for the item.
 
Example:
Add the following item on the Item Master Data:
Item
Item No. Description Price Managed by
Group
Acer Aspire 5 Serial
SN1000 Laptop 30,000
A514 Numbers
OEC Computers UK received 10 items of SN1000
from Acme Associates.
Serial Number String: OEC-AcerL-00001
Later on, OEC computers UK delivered 5 items of
SN1000 to Norm Thompson.
 
Go to (1) Inventory → (2) Item Master Data. Switch to Add mode (Ctrl + A).
3. Input the information above regarding the
4. On the general tab, there is a Manage Item By drop down list,
select ‘Serial Numbers’. Management Method, ‘On every transaction’.
5. Click Inventory Data tab
6. Input the information according the warehouse assigned to your branch
Warehouse Code: 01
Warehouse Name: General Warehouse
7. Click Add.
 The whole Procurement and Sales Process should still be done completely.
But for example purposes and to address this topic directly, we will only use
Goods Receipt PO and Delivery.
 
Go to (8) Purchasing A/P → (9) Goods Receipt PO
                      10. Input the following information: Vendor: V10000 Acme Associates
                       11. Item No: SN1000
                              Quantity: 10
                      12. Click Click Yes, if prompted the message “You cannot change this
document after you have added it”.

     13. Serial Numbers Set-up window will appear. Click the ‘You can also’ button on the lower
right corner of the window, and select automatic creation.

  14. Automatic Serial Number Creation window will appear. Click the button beside the
Serial Number
                     15.Automatic String Creation window will appear. Input the following:

       

# String Type Operation

1 OEC-AcerL- String No Operation

2 00001 Number Increase
 
                        16.  Click OK.
                      17. Click Create.

18. Serial Number for all 10 items should be

19. Click Update
20. On the Goods Receipt PO window. Click Add.
      
     Go to (21) Sales A/R → (22) Delivery
                           23. Input the following information:
                                 Customer: C20000 Norm Thompson
                           24. Item No: SN1000
    Quantity: 5
                           25. Click Click Yes, if prompted the message “You cannot change this
document after you have added it”.

     26. Serial Number Selection window will Click Auto Select. 5 items will automatically
selected on a First-In First-Out basis.
                     27. Click Update. Click
                     28.On the Delivery window, click Add.
 By Batches
Batches are used to track groups of items with characteristics in
common. These characteristics might be attributes you define such as a
shade of color, granularity or PH balance. The characteristics could be dates,
such as expiration dates, manufacturing date, or the date the items were
received into inventory.
Example:
Add the following item on the Item Master Data:
Managed
Item No. Description Item Group Price
by
BN1000 Mousepad Accessories 50 Batches

 
OEC ordered and received 100 items of BN1000 from Acme Associates.
Items will be divided into 10 batches.
Batch number: Box-0001
Batch Attribute 1: OEC-MP-00001
OEC sold 27 items of BN1000 to Norm Thompson, via FIFO.
 
Go to (1) Inventory → (2) Item Master Data. Switch to Add mode (Ctrl + A).
3. Input the information above regarding the
4. On the general tab, there is a Manage Item By drop
down list, select ‘Batches’. Management Method, ‘On
every transaction’.
5. Click Inventory Data tab
6. Input the information according the warehouse assigned to your
                                                Warehouse Code: 01
                                                Warehouse Name: General Warehouse
                                 7. Click Add.

The whole Procurement and Sales Process should still be done completely.
But for example purposes and to address this topic directly, we will only use
Goods Receipt PO and Delivery.
 
Go to (8) Purchasing A/P → (9) Goods Receipt PO
                       10. Input the following information:
                              Vendor: V10000 Acme Associates
                        11. Item No: BN1000
                               Quantity: 100
                         12. Click Click Yes, if prompted the message “You cannot change this
document after you have added it”.

 13.Batches Set-up window will appear. Click the ‘You can also’ button on the lower right corner
of the window, and select automatic creation.

   14. Automatic Batch Creation window will appear. Set the number of batchers to
                 15. Click the button beside the Batch
                 16. Automatic String Creation window will appear. Input the following:
# String Type Operation
1 Box- String No Operation
2 0001 Number Increase

                  17. Click OK

 18.  On the Automatic Batch Creation window, click the button beside the Batch
Attribute 1 field
              19. Automatic String Creation window will appear. Input the following:

# String Type Operation

1 OEC-MP- String No Operation
2 0001 Number Increase

 
               20. Click OK.
               21. On the Automatic Batch Creation window, click Create

    22. Batchers for all 100 items should be created

               23. Click Update 
               24. On the Goods Receipt PO window. Click Add

Go to (25) Sales A/R → (26) Delivery

                     27. Input the following information:
                           Customer: C20000 Norm Thompson
                      28. Item No: BN1000
                            Quantity: 27
                      29. Click Click Yes, if prompted the message “You cannot change this
document after you have added it”.

   30. Batch Number Selection window will Click Auto Select. 5 items will automatically
selected on a First-In First-Out basis.
                      31. Click Update. Click
                      32. On the Delivery window, click Add.