Physical Inventory Process

[Former Member]

Hi,

Can any ony one explain me how to do the process of physical inventory?

[Former Member · Accepted solution]

hi

Physical Inventory:

Physical Inventory is a business process in which physical stock is matched with book (system) stock. It is legal requirement to carry out physical inventory at least once in a year.

Physical inventory can be carried out both for a companyu2019s own stock (Unrestricted, Quality, Blocked Stock) and for special stocks (Customer Consignment stock, Vendor consignment stock from vendor, Returnable packaging). This inventory is carried out saperately for both type of stocks.

Physical Inventory Processes:

Several inventory processes available for physical inventory which includes as follow:

1. Periodic Physical Inventory

o All stocks of the company are physically counted on the balance sheet key date

o Every material must be counted

o Entire warehouse must be blocked for material movements during count.

2. Continuous Physical Inventory

o Stocks are counted continuously during the entire fiscal year.

o It is important to ensure that every material is physically counted at least once during the year.

3. Cycle Counting

o In this method of physical inventory, inventory is counted at regular intervals within a fiscal year.

o These intervals (or cycles) depend on the cycle counting indicator set for the material in Material Master record as CC indicator in plant view data.

o With this Cycle Counting Method of Physical Inventory allows fast-moving items to be counted more frequently than slow-moving items.

4. Inventory Sampling

o Randomly selected stocks of the company are physically counted on the balance sheet key date.

o If found not much variance between the counted stock and the book book stock, it is presumed that the book inventory balances for the other stocks are correct.

Physical Inventory Process Cycle Flow

1. Creation of physical inventory document

- Physical inventory document(s) is created individually or using the batch program, click for more information

- The transaction codes for creation physical inventory are as follow

• Individual Inventory documetion creation

MI01 - Individual physical inventory creation

MIS1 - Inventory Sampling document creation

MICN - Cycle count inventory document creation

• Collective Inventory document creation

MI31 - Own stock without spcial stock

MIK1 - Vendor consignment

MIQ1 - Project stock

MIM1 - Returnable Transporation material

MIW1 - Customer Consignment stock

MIV1 - Returnable material with customer

MIO1 - Material provided to Vendor (Subcontracting material)

2. Print physical inventory document

- Physical Inventory document can be printed based on the physical inventory document status and or item status

- Transaction code MI21 is used to print the inventory document where print default value can be populated

3. Count the physical stock

- Based on the inventory doucmen printout, the warehouse person will check the stock of material physically and note that on print out. This is completely physical process.

4. Enter count in system

- On completion of physical count, the count result is needs to be entered in the system. This can be with reference (using Tcode MI04) or without reference (using Tcode MI04) to the physical inventory document.

- If count quantity for that material is ZERO then select ZC (zero count) column instead of putting 0 in qty field. If 0 is used for zero count then systm will consider that as "not counted"

5. Analyze difference

- Once count is posted in the sytem, difference analysis can be carried out using trasnaction MI20

- The output gives information based on the input criteria i.e. physical inventory document, plant, material etc.

- The output gives information about the book quantity, Counted quantity, difference in quantity and value.

- From this output list, you can carry out further process ie initiate recount, change count quantity, post difference

6. Initiate recount and follow the steps 3,4,5

- If found unacceptable difference, recount is initiated using directly from difference analysis list (transaction code MI20) or using transaction code MI11.

- New inventory document will be created for selected items or for entire document

- The original document items will be deactivated once recount is initiated so original document will not be available for further process.

- On initiating recount, you need to process same as for new count document.

7. Post the difference

- Several options are available for posting difference

- Post difference after count is posted using transaction code MI07

- Posting the count and inventory differences using transaction code MI08, here you have created physical inventory but not counted so with this you can count and post difference in sinle step.

- Entering the count without a document reference using trasnaction code MI10, with this you can create inventory document, enter the count and post difference in single step.

some more points for posting difference

- Posting period must be open to post inventory difference.

- The fiscal year is set by specifying a planned count date when creating a physical inventory document.

- Tolerence to crear difference per user group can be set in customization.

- The system will generate material document for the difference qty and post the value to appropriate account (for valuated stock)

- The movement type in material document will be 701 or 702 based on gain or loss of material.

Serial Numbers in Physical Inventory

If material is managed with serial number then it is possible to carry out physical inventory for material with serial number. There are some pre-requisite before you carry out physical inventory for serialized materials.

- Serial number profile must be maintained in the material master.

- the serialization procedure MMSL (maintaining goods receipt and goods issue documents) has to be assigned to serial number profile.

- The stock check indicator in the serial number profile should be configured.

- Maintain basic settings for the serial numbers in customization for Serial Number Profile.

- Configure serial number management for physical inventory in the Settings for Physical Inventory step in Customizing for Inventory Management.

regards

ravikant dewangan

[Former Member]

This message was moderated.

[Former Member]

pls follow the link:

/people/community.user/blog/2007/05/04/physical-inventory-in-material-management

regards,

indranil

[former_member192897]

Hi,

Physical Inventory is a Process in which Company Stops all his Goods Movements and Do a Physical inventory Manually.

To avoid Inconsistancies which may shut down business process.

Physical Inventory Can be done in four ways

Cycle Count

Periodic Count

Continuous Count

Sample Count

You can do Physical inventory for the materiuals which are in Unrestricted, Quality & Blocked State.

You can Block the Goods Movement or Freeze book Records during the Physical Inventory Process.

First Create a Physical Inventory Document Thru. MI01 Trxn code

Count the Stock Physically and enter the same in MI04 Trxn code.

Post the Diff in MI07 Trxn code.

If Physical Inventory Stock is more than book records 701(Check with OMBS) reason will take place.

Check all the reason for movements for Physical Inventory postings.

You can Enter the Count ie You can do MI10 (Enter the Physical Inventory Values) with out creating Physical Inventory Document MI01.

If diff is more you can recount the Stock and enter the same in MI11 Trxn Code.

Hope this will help you in understanding Physical Inventory Process.

Reg,

Ashok

• Assign points if useful.

[Former Member]

Hi,

Physical Inventory Process

What are the step to do physical inventory process? I want to make zero stock and then upload the actual stock?

First you can use the trn. MI01 there put all the material save, then use T-Code MI04 there you have to enter the count the if you want put 0, put it and make the tick then save then use MI22 post the difference.

About Physical inventory process you have another way :

1. Use t-code MI31 instead of using MI01 , it will give you a document number of all your stock.

2. If you did not get the document number use t-code MI24 .

3. MI21 to print the document.

4. MI04 to enter the count if you want put 0.

5. MI07 post.

Create PI document using MI01 (MI31 -Using Batch)

Enter Count Using MI04 (Select Zero Stock Indicator)

Post Count results using MI07

Check Results using MI24

Upload initial Stock using MB1C 561

Physical Inventory in Material Management

/people/community.user/blog/2007/05/04/physical-inventory-in-material-management

http://www.sap-img.com/materials/physical-inventory-process.htm

http://help.sap.com/saphelp_erp2004/helpdata/EN/4d/2b8e3d43ad11d189410000e829fbbd/frameset.htm

[Former Member]

The Perform Physical Inventory process includes the activities listed below:

Generate PI Document:MI01

Perform Count:MI04

Perform Re-Count if any mistakes has happened in MI04:MI11

Enter Count again :MI04

Compare Count Results with System and then

Clear Differences IM:MI07