Inventory adjustment journal in AX 2012 (Profit and loss journal in old AX versions)

Hello Everyone,

In this topic, we are going to see the importance of creation & posting of inventory adjustment journal and its significance in business.

Inventory adjustment journal (Profit and loss journal) is use in AX for making the adjustment in inventory in order to maintain the inventory accuracy in the system. It is also use to write off inventory from the system.

Inventory adjustment journal is used when:

1.Item lost from the inventory.

2.Item gets damaged due to mishandling or by any other means.

3.Sometimes item which is lost or stolen can be found/recovered.

In order to match the quantity in the system with the actual physical quantity, the inventory adjustment journal is posted, there by we maintain the inventory accuracy.

Inventory adjustment journal automatically applies financial transactions to preset accounts for profit and loss.

Steps to create and post the adjustment journal:

1.Go to inventory management > Journals > Item transactions > Inventory adjustment.

2. Click on "New" to create new adjustment journal.

3. Select:
a. Name: It is a journal name created for adjustment journal consist of setups like journal types, voucher series etc. which are necessary while creating a journal.
b.Journal: Journal number generates automatically as the number sequence is set to "Continuous" in this case.
c. Description: It will come automatically from the journal name. We can also edit the same as per our requirement.

3. Click on Lines to open the journal lines form.

4. Enter:
    a. Item number: Enter the item number for which adjustment needs to be done
    b. Storage dimension:Enter storage dimensions such as Site, warehouse, Location, pallet id.

   Note: Here Site and warehouse are the mandatory dimensions. Locations and pallet id can be entered if it is mandatory.

    c.Tracking dimension: Enter tracking dimensions such as batch number, serial number if mandatory.

5. Quantity and cost amount: if you are adding the inventory then enter the positive value in the quantity field. If the quantity is positive then you can edit the value displayed in the cost amount/cost price field.

6. Quantity and cost amount:if you are reducing the inventory then enter negative value in the quantity field. If the quantity is negative then you cannot edit the value displayed in the cost amount/cost price field.

7. If you want to post the adjustment for some other items then add some more lines in the journal.

Validate
8.Once all required information is entered, Click on validate button to validate the journal

9. Click Ok for validation.

Note: If you get any error, warning  then address them first and then re-validate again to check the journal.

Post
10. Click on post button in order to post the journal.

Note:Place a checkmark if you want to transfer all the defective lines to the new journal.

11. Click Ok to post journal.

Inventory Transactions
12. Go to inventory >  transactions for the line which has negative quantity

13. You can see that the -2 quantity is updated in the system i.e. 2 quantity is reduced from the inventory and cost amount is calculated for the same automatically.

14. Go to inventory > transactions for the line which has positive quantity.

15. You can see that 3 quantity is updated in the system i.e. 3 quantity is added in the inventory and cost amount is also the same amount which we have entered in the journal lines.

Financial impact
16, Go to Inventory > transactions > Ledger > Financial voucher

17. If the inventory is increased during adjustment then inventory profit and inventory receipt accounts will get updated with the inventory cost.
18. If the inventory is reduced during adjustment then inventory loss and inventory issue accounts will get updated with the inventory cost.

Due to above reasons, the inventory adjustment journal is also called as profit and loss journal.

In this way, we can create and post the inventory adjustment journal.

Please post if any queries or suggestions to be made on this topic.

Happy Daxing :-)

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Abhijeet Hele |  Dynamics AX Enthusiast | My Profile | 

The information provided on this site represents my own opinion/view and does not represent the opinion/view of my employer or Microsoft.