Physical Inventory Process

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Steps Involved

Define a physical inventory for your whole warehouse or

subdivisions within your warehouse.
Take a snapshot of system on–hand quantities. You must
procedurally coordinate the snapshot of your physical inventory
with your actual counting, and ensure that no transaction activity
occurs in a particular location until after you have performed
your adjustments.
Generate alphanumeric tags.
Perform Physical Counting and enter them into the system.
Void unused or lost tags.
Approve or reject physical inventory adjustments based on
approval tolerances.
Automatically post adjustments to inventory balances and
general ledger accounts.

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Overview

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Define Physical Inventory

Navigate to GEINV Manager ->

Counting ->Physical Inventory
->Physical Inventories

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Define Physical Inventory

Click on New

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 Define Physical Inventory
Enter the Name and
Description of the
Physical Inventory.

Select ‘All’ if counting is

to be performed for
complete inventory or
‘Specific’ in case of any
specific Subinventories.

Select the appropriate

requirement for
adjustments.

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 Define Physical Inventory

Approval requirements for adjustments:

Always: Require approval of all physical inventory adjustments.
If out of tolerance: Hold for approval those counts that are
outside the limits of the positive and negative quantity variance
or valuetolerances.
Never: Allow any adjustment to post without approval.

Indicate whether to allow dynamic entry of tags:

Determines whether you can dynamically enter tags you
manually created. If you choose not to allow dynamic tag entry
all tags must be generated before use. If you do not want to
allow dynamic tag entry but you need blank tags, you can
generate numbered blank tags for counting miscellaneous
items.
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 Take Snapshot of System on-hand quantities

Before you can generate tags for a physical inventory, you

must take a snapshot of all system on–hand quantities for
your items. The snapshot saves all current item on–hand
quantities and costs. Oracle Inventory uses this information as
the basis for all physical inventory adjustments. All tag
counts you enter for this physical inventory are compared
with these static quantities.

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Take Snapshot of System on-hand quantities

Click on Snapshot. A
concurrent request will
be submitted.

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Take Snapshot of System on-hand quantities

Once the request is completed, re-query

the Physical Inventory. The ‘Snapshot
Complete’ checkbox I checked and the
‘Snapshot Date’ gets updated.

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 Tag Generation

Oracle Inventory can generate default or blank tags. If you choose to

generate default tags for each item, specify the starting tag number and the
increment by which you want to increase each digit in the tag number. The
tag numbers may be alphanumeric, but you can increment only the numeric
portion. The alphabetic characters in the tag number stay constant. Inventory
then uses these tag numbers to generate a tag for every unique combination
of item number, revision, subinventory, locator, lot, and serial number for
which the system has an on–hand quantity not equal to zero. If you want to
have some empty tags handy to record counts for stock–keeping units for
which Inventory has no on–hand quantity, you can generate blank tags.
Inventory assigns tag numbers to blank tags, but does not include any item or
location detail. You specify this information when you enter your tag counts.
You can generate as many blank tags as you want. You use physical
inventory tags to record the physical counts of inventory items. A tag
contains the count for a group of a given item. Although you can record only
one item on a tag, multiple tags can reference the same item, with each tag
referring to a unique physical location for an item.
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Tag Generation

Click on
‘Tags’.

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Tag Generation

Specify the type of Tags to

be generated, and whether
Serial numbers should be
displayed on Tags.
Specify the
starting Tag
number and the
increment.

Click on Generate.

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 Tag Generation

Indicate whether you want to show serial numbers on the

physical inventory tags. If you choose not to show serial
numbers on the tags, you get a tag for each item but you have
to match the serial numbers to the items manually. You can
enter a value in this field only if you selected Default tags in
the Tag Type field.
Enter the starting tag number. Tag numbers may be
alphanumeric, but you can increment only the numeric portion.
When entering a starting tag number be sure that it
contains the total number of possible digits that a tag can have.
For example, if your tag numbers can have up to five digits and
you want the starting number to be 1, you would enter 00001.

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Tag Generation – Blank Tags

To generate Blank
Tags, select the tag
type as ‘Blank’.

Enter the Starting

Tag number, the
increment and the
Ending Tag Number.

Click on Generate.

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 Tag Generation
Submit the request
‘Physical Inventory
Tags’ to generate and
print Tags.

Select the appropriate

Parameters

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Tag Generation – Sample Tag Listing Report

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 Physical Inventory Counts

Physical Inventory Counts

Use the tags generated to record the physical counts. If you
use default tags, you can automatically query all tags and fill in
the counts.
If you use any blank tags, you can query up the tags by tag
number. You can then enter the necessary item, revision,
subinventory, locator, lot, and serial number information, as
well as the actual count quantity and the name of the employee
who performed the count.
If you enable dynamic tag entry, you can enter counts for any
item and stock–keeping unit combination without a
pre–generated tag number.

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Physical Inventory Counts

Navigate to GEINV Manager ->

Counting ->Physical Inventory
->Tag Counts

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 Physical Inventory Counts
Enter the Physical
Inventory details and
click on ‘Find’.

Enter the Physical

Count Quantity
against the Tag
Number

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 Physical Inventory Counts

Once the Physical Count quantities have been entered in the

system, run the ‘Physical Inventory Counts Report’ to check the
quantities entered against Tags/Items.

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 Physical Inventory Counts

Also check the ‘Physical inventory missing tag listing’ report

to check for the tags against which not count has been entered.

Sample of ‘Physical
Inventory Missing Tag
Listing’ Report.

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 Void Tags

It is important for auditing purposes to track the status of each

physical inventory tag. Therefore, if you do not use one or more of
the tags Oracle Inventory generates, you should void them in the
Physical Inventory Tag Counts window. A voided tag is not
reported as a missing tag in the Physical Inventory Missing Tag
Listing. If you generated a certain number of blank tags at the
beginning of your physical inventory, and ended up not using all of
them, you would void the unused tags. When you run the Physical
Inventory Missing Tag Listing for the whole range of tags you
initially generated, the unused ones are accounted for and appear as
missing tags. If you void a default tag, Oracle Inventory adjusts the
quantity in that location to zero. This indicates that you did not use
the tag in question, presumably because the stock–keeping unit
corresponding to the tag did not exist.
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Void Tags

Check the ‘Void’

checkbox to void
individual Tags.

Query for a range of Tags

to be void and click on
‘Void All’ button.

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 Approve/Reject Physical Inventory Adjustments

Once all the Counts have been entered and the unused tags
voided, run the ‘Physical Inventory Adjustments Report’. This
report shows all adjustments against unique combinations of
item, revision, subinventory, locator, lot, and serial number for a
user–specified physical inventory. This report shows all
adjustments against unique combinations of item,
revision, subinventory, locator, lot, and serial number for a
user–specified physical inventory. You can run this report
before processing your adjustments to get a preview of your
adjustment quantities and values. You can then determine
whether you are ready to process all final adjustments or
whether you need to recount certain locations. If found ok, you
can proceed to Adjustment Approval.

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Approve Physical Inventory Adjustments
Sample of ‘Physical
Inventory Adjustments
Report’.

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Approve Physical Inventory Adjustments

Navigate to GEINV Manager ->

Counting ->Physical Inventory
->Approve Adjustments

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 Approve Physical Inventory Adjustments

Adjustments can be
approved for individual
items by selecting the
‘Approve’ Radio Button.

All the adjustments can be

approved at once by clicking
on the ‘Approve All’ button.

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 Process Physical Inventory Adjustments

After you finish entering all your tag counts and approving
those adjustments that need approval, you can submit the
process that automatically posts your physical inventory
adjustments. Oracle Inventory automatically creates a material
transaction adjusting the item quantity and debiting or crediting
the adjustment account you specify for your physical inventory.
If the count of an item matches the snapshot system on–hand
quantity, there is no adjustment transaction posted. You must
approve or reject all of your adjustments before you can process
them.

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Process Physical Inventory Adjustments

Navigate to GEINV Manager ->

Counting ->Physical Inventory
->Physical Inventories

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 Process Physical Inventory Adjustments

Query for the Physical Inventory, Click on Tools and select

‘Launch Adjustments’.

Select the appropriate Adjustment

Account and the date, and click on
‘Launch Adjustments’.

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 Summary Reports

Physical Inventory Summary Report:

This report provides a summary of your physical inventory
adjustments by subinventory. You can see, in your functional
currency, the system on–hand value, the actual count value, and
the resulting adjustment value, as well as the number of tags and
adjustments performed for each subinventory. You can also use
this report as a management tool to monitor the accuracy of
your inventory as it also includes the error percentage of your
original system on–hand quantities and values.

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 Summary Reports

Physical Inventory Trend Report:

This report compares past physical inventories so that you can
see whether record accuracy has improved over time. It provides
a summary of physical inventory adjustment values, by date and
subinventory, as well as the number of tags and adjustments
each
subinventory required. You can view subtotals for each physical
inventory as well as a grand total of all your physical inventory
adjustments over time.

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