Annual Periodic) Inventory in A Warehouse
Annual Periodic) Inventory in A Warehouse
Annual Periodic) Inventory in A Warehouse
Warehouse
Applies to:
Logistic Execution-Warehouse Management system- 4.6B or higher. (The scenario carried out in ECC 6.0)
Summary
Annual Physical inventory is a process were all the enterprise’s stocks are physically counted on the balance
sheet key date at warehouse level. Every material has to be counted. During counting, the entire warehouse
must be blocked for material movements.
The main purpose of this article is to list down all possible steps with screen shots that are required to carry
out the Annual inventory in a warehouse. This article will help understand the entire flow of Annual physical
inventory with detailed steps shown at each point with screen shots and required notes.
Author: Shalini Tripathi
Company: Intelligroup Inc
Created on:14 Jan 2009
Author Bio
Shalini Tripathi has over eight years of experience in Supply chain management. She is a certified SAP MM
consultant and has worked on multiple SAP projects including upgrades, implementations and roll outs both
at MM and WM level.
Table Content
Preparation prior to the Annual inventory ...........................................................................................................3
Annual Inventory process .................................................................................................................................12
Step 1 Run Report for Stock Comparison at IM/WM report .............................................................................12
Step 2 Block the Storage Type.........................................................................................................................13
Step 3 Create Annual Inventory Document ......................................................................................................16
Step 4 Print Physical Inventory Document .......................................................................................................20
Scenario I: .....................................................................................................................................................22
Scenario II: ....................................................................................................................................................23
Scenario III: ...................................................................................................................................................25
Step 6 Recount and Correction ........................................................................................................................31
Recount and Correction ................................................................................................................................31
Transaction LI12N......................................................................................................................................................31
Step 7 Run the Variance Report.......................................................................................................................34
Step 8 Clear difference at WM level .................................................................................................................36
Step 9 Clear difference at IM level ...................................................................................................................41
Step 10 Run Report ..........................................................................................................................................44
Related Content................................................................................................................................................45
Disclaimer and Liability Notice..........................................................................................................................46
Before carrying out the physical inventory process, following needs to be taken care:
• No stocks lying in interim bins:
Steps to check stocks in interim bins:
Go to Lx03:
Enter warehouse number and Storage type from 900 to 999:
All interim stocks lying in 901,902,904,921,922,911,914,914 needs to be cleared before carrying out the
inventory process.
• All open transfer requirements needs to be processed:
Go to LB10
Enter warehouse number and tick on:
Status open
Partially delivered.
Go to Lu04
Enter Warehouse number and tick on Status :Open and Part completed.
The open PCN needs to be processed by creating Transfer orders. Once PCN converted to TO’s the list is
cleared.
• Check for open Transfer orders. This is extremely important before going for Physical
inventory. NO open Transfer orders needs to be present.
Go to LT22 to check for unprocessed transfer orders:
Clear the list by confirming TO’s .Once cleared, no list will appear.
.Select the delete from the Physical inventory menu and delete the record.
Click on Yes.
• Check batch jobs concerning IM and WM movements and stop them before carrying out the
Physical inventory process.
Go to SM37 transaction to check jobs.
• Bins Master list needs to be checked and updated.
Check the Master bin list for each warehouse. The added bins after last year count needs to be
updated once carrying out the count for the next fiscal year. The entire active bins needs to be
included.
Annual inventory is the stocktaking of all stock in a company on a fixed date (usually at the end of
the fiscal year). There are no transfers in the warehouse on this day.
The result shows NO variance in the stock between WM and IM. This means MMBE and
LS24/LS26 are in sync for the Material Batch combination. The total stocks in storage bins+
Interim Bins correspond to stock in IM.
1. Block the affected storage types for put away and stock removals. The block will restrict the
movement in the storage type for the warehouse.
PROCEDURE
In the SAP Menu, choose Logistics Logistics Execution Internal Whse Processes
Physical Inventory In Warehouse Management Block Storage Type.
Click on Position tab. Another Entry screen will appear. Enter the warehouse number and
storage type
The system will take to storage type xxx for warehouse AAA.
Click on the box Plcmnt blo and Rmvl blo. This means that the entire storage type 001 will be
blocked for stock placement and stock removal.
This is a very important step before carrying out the Physical Inventory count at WM level. If the boxes are not ticked the
movements will take place at the storage type if carried out during PI.
2. Select the storage bins for which you want to perform the physical inventory.
A Master list has to be prepared for the bins that needs to be selected to create the Physical
Inventory document.However before working on these Master list, it should be made sure that NO
BINS have been added after the last count and there no bins that are not existing in SAP. The work
out must been done much before the Physical Inventory dates and the business must be updated
with the changes made to the list.
In the SAP Menu, choose Logistics -----Logistics Execution ----- Internal Whse Processes -----
Physical Inventory ----- In Warehouse Management------ Physical Inventory Document ------ Create --
----- Annual Inventory
Because the annual inventory requires the system to process extremely large quantities of data, the
system always creates a batch input session. The system creates and activates the system inventory
record in the background.
The system lists all storage bins in which you were not able to perform an inventory under the
totaled storage bin list.
Since the system usually creates several inventory documents due to the large volume of data, it is
recommend to always assign a reference number. This reference number can be used to quickly
find inventory documents again.
Enter Warehouse number, Storage type, storage bins to be counted, count data and the session
name.
Select Activate Inventory list button.
Select Background as run mode. Select extended log and Dynpro standard size in additional functions. Click
on process.
Click on display
Once the document is created make a note of it against the columns of Bins in the Master Excel sheet . This
help in back tracing the records and checking if any bins are missed by comparing Master list and Inventory
record number on the system.
The printouts of the physical inventory document to perform the physical inventory of the storage
bins.
A In the SAP Menu, choose Logistics ----- Logistics Execution ----- Internal Whse Processes ------ Physical
Inventory ------ In Warehouse Management-----Physical Inventory Document ------ Print Whse Invent. List.
Transaction LI04
Carry out the physical inventory in the warehouse for the selected storage bins.
The Warehouse Inventory list for Annual Inventory has to be given to the counters responsible
for entering the physical count. The person responsible for entering the count needs to check for
the quantity for the respective material and batch. Following needs to taken care:
Once the counter identifies the Material in the bin as per the count sheet, he should enter the qty
and the correct UoM.Counters will go to the bin listed on the sheet and enter the counted
quantity in the space provided.
If the material printed on the sheet is not found in that location, the counter will enter 0 as the
quantity.
If a different material is found in the bin, the counter will record that material and quantity on
the found material sheet.
. Step 5 Count
Once the counting is complete for the respective Inventory sheet physically, the inventory count results
needs to be entered in SAP.
A From the SAP menu, choose Logistics ------ Logistics Execution ------- Internal Whse Processes ---------
Physical Inventory ------ In Warehouse Management ----- Count Results Enter.
The count sheet appears in SAP. Start entering counts based on the entry made by counters on the count
sheet.Few scenarios to take care while entering the counts:
Scenario I:
The storage bin 03-10-01 was empty physically, the tick box “Z” is ticked.
The Z box is ticked when the bin is empty or when the material mentioned on the count sheet next
to the bin is not found. Thus the tick marks shows that Means that the storage bin is empty or that
the material does not exist in the storage bin.
Scenario II:
Case where the bin is empty as per SAP but there is found material on ground. In this case the
counter on the FOUND MATERIAL SHEET will make an entry:
Once you have completed all the entries and try to Save, Material found, Old stock =0, pop will come at the
bottom of the screen confirming the Material is added.
Scenario III:
There may be a case where more than one material are found in the bin:
To add more than one material on the bin, click on NEW ITEM icon:
Click on Enter. Enter the Inventory page number which correspond to page on which the bin found on count
sheet and GR number. The GR number will be mentioned in the found sheet by the counter.
Same way the entry is made for another material found in the bin.
Once the entry is made for second material also, to go back to the main screen click on Enter.
One can click on save button, in case want to exit the count:
SAP menu
Transaction Code
LI13N
Transaction LI11N
Complete the data entry for other bins based on the count sheet:
Transaction LI12N
Enter Warehouse number, Inventory record number and count date.
Click on SAVE.
Recount in SAP
You may execute an inventory recount for all items in the system inventory record, for which the
differences seem very high before carrying out the change in inventory records.
Logistics --- Logistics Execution ---- Internal Whse Processes --- Physical Inventory ---In
Warehouse Management --- Count Results --- Recount.
Enter data as required. You can also enter a percentage or monetary value as a deviation
threshold on this screen. Select the storage bins for which you want to carry out a recount.
The Finance department to check and reconcile the difference between the physical and book count
runs this report.
If required based on the variance, recount is initiated and the physical count checked before
investigating and clearing the difference.
Click on execute
Get the summation for the qty and price to analyze the variance
The variance needs to be analyzed for the difference in the qty at book and physical level. Once it is
analyzed the changes can be done in the count sheet for Qty and UoM.
The following two movement types are defined for handling differences:
For differences where the quantity does not exist in the storage bin but is recorded in the books, use
movement type 711. In this case, the difference must be cleared from the warehouse and posted to the
interim storage type for differences.
For differences where the quantity does exist in the storage bin but is not recorded in the books, use
movement type 712. In this case the difference must be cleared from the interim storage type for differences
and posted to the warehouse.
As soon as you have confirmed the transfer order item, the system posts the difference to the storage bin
that has been specified for the respective difference indicator.
You must clear all the stock difference that you have corrected in the Warehouse Management system
(WMS) from the WMS and then report them to inventory management (MM-IM).
The system Post the differences to the interim storage area for differences. In the standard system, storage
type 999 is set up as the interim storage area for differences.
The system removes the storage bin block, so that the bins are available again for stock movements after
the inventory is complete.
Note: Only one inventory record can be cleared at a time. This is a standard SAP functionality. However in
case multiple records need to be cleaned, option needs to be analyzed for customized report.
The detail for the counted qty and the book qty is reflected, giving the variance.
Once we try to clear the bin 03-10-10, movement type 712 will take place to put the stock from 999 to bin in
which the found material was added in the count sheet.
Once the bin is cleared of the variance, the stock moves to interim bin 999, which is the SAP standard. To
analyze the stock moved to 999, execute the transaction LX03 for bin status:
The stock lying in interim bin after the clearance of variance is shown in 999 interim bin:
Once the bins are cleared, Transfer order is created to move stock from /to interim bins 999 from
source/destination bins
Clearing the difference at 999 bins at WM level to match the stock in IM and WM
SAP menu
Enter warehouse number and the storage type 999. It is mandatory to enter storage
type 999 and NOT ANY OTHER STORAGE TYPE. As explained earlier the differences are carried in interim
bin 999 and the same needs to be cleared to maintain the stock at WM and IM. In case, wrong execution of
LI21 is done and any other storage type selected instead of 999, the stock will move from that storage type
e.g. 001 causing the major mismatch of inventory and major loss of currency. Thus extreme care should be
taken before executing LI21.
The list displays the stocks in 999 needs to be cleared at IM level to match the stock at WM and
IM.Storage bin takes the Physical Inventory number in this case 00000000002. Select the bin to be
cleared.
Material document created once the quant cleared. Click on the document to see the details of material
movement.
Following movement are initiated when stocks movement takes place in any other stock category apart from
Restricted:
Block stock:
717/718 movements
Quality stock
713/714 movements
Return stocks
715/716
The PI does not include the Return stocks and thus they need to be cleared before carrying out the PI.
Note: It is noticed while executing LI21, own ID gets locked. This is due to the mass processing of LI21 records at one
time where same material records are processed simultaneously. To minimize locked records, run the LI21
transactions by selecting small number of records 25-50 at one time.
After the physical inventory is complete for the fiscal year, reset the inventory data for storage bins and
storage quants using the RLREOLPQ report. In the next inventory period, this help to perform a new physical
inventory for these storage bins or quants
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