Chapter6 Inventorycycle

SAP B1 on Cloud Accounting Information System
CHAPTER 6: INVENTORY CYCLE
Overview
At the end of this chapter, the student will be able to:

1. Set up item groups and define warehouses
2. Manage items with batch and serial numbers
3. Transfer goods using goods issue, good receipt, and inventory transfer
4. Use pick and pack in the sales process
5. Create new pricelists and provide discounts
6. Make order recommendation using Materials Requirements Planning
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.
Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph
Page 42 / 87
SAP B1 9.3 printed on 7/23/2021 10:42 AM

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.
Page 43 / 87

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 and sale of an item are, 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
Page 44 / 87

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) (2) (3) Goods Receipt.

4.
5. I
6.
7. Click 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 .
4. ist) button. Select A00001.
5.
6.
Page 45 / 87

7. Click Add.
Page 46 / 87

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: 02
From Warehouse: 01
Quantity: 5
5. Click Add.
Page 47 / 87

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 No. Description Item Group Price Managed by
SN1000 Acer Aspire 5 A514 Laptop 30,000 Serial 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.
. Switch to Add mode (Ctrl + A).

3. Input the information above regarding the item.
4.
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.
Page 48 / 87

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 ) Goods Receipt PO.
Page 49 / 87


Vendor : V10000 Acme Associates
11. Item No : SN1000
Quantity : 10
12.
13. Serial Numbers Set-

corner of the window, and select automatic creation.
Page 50 / 87

14. Automatic Serial Number Creation window will appear. Click this button beside the
Serial Number field.
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 created.

19. Click Update, then Click OK.
20. On the Goods Receipt PO window. Click Add.
Page 51 / 87


Customer : C20000 Norm Thompson
24. Item No : SN1000
Quantity :5
25. cannot change this document after you
26. Serial Number Selection window will appear. Click Auto Select. 5 items will automatically
selected on a First-In First-Out basis.
27. Click Update. Click OK.
28. On the Delivery window, click Add.
Page 52 / 87

Page 53 / 87

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:
Item No. Description Item Group Price Managed 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.
Master Data. Switch to Add mode (Ctrl + A).

3. Input the information above regarding the item.
4.
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.
Page 54 / 87

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.

Vendor : V10000 Acme Associates
Item No : BN1000
Quantity : 100
11. cannot change this document after you
Page 55 / 87

13. Batches Set-

of the window, and select automatic creation.
14. Automatic Batch Creation window will appear. Set the number of batches to 10.
15. Click this button beside the Batch field.
1 Box- String No Operation
17. Click OK.
18. On the Automatic Batch Creation window, click this button beside the Batch Attribute 1
field.
Page 56 / 87

1 OEC-MP- String No Operation
20. Click OK.
21. On the Automatic Batch Creation window, click Create.
22. Batches for all 100 items should be created.

24. On the Goods Receipt PO window. Click Add.
) Delivery
Customer : C20000 Norm Thompson
28. Item No : BN1000
Quantity : 27
Page 57 / 87

29.
30. Batch Number Selection window will appear. Click Auto Select. 5 items will automatically
selected on a First-In First-Out basis.
32. On the Delivery window, click Add.
Page 58 / 87

Price Lists and Discounts
You can define multiple price list for your items. A price list contains items. Price lists can be
based on other prices lists by using a percentage mark-up. Every item is linked to every price list.
You can assign a price list to the customer master record on the Payment Terms tab. When you
enter the customer in a sales document, the assigned price list will default to the document. The system
will then use that price list to price the items in the order.
Of course, more complex pricing can be used such as special prices, discount groups, and pricing
hierarchies. Prices can also be changed in the sales order by authorized users. For example, a
salesperson might give a 5% discount to a particular item or to a whole sales order.
Using the different pricing options in SAP Business One, you can set predefined prices for selling
and buying items. Typically, a business will choose only those options that make sense for how they
price items. For example: If a company sells smaller items to other businesses, they are more likely to
use volume discounts. A company selling higher priced items may focus on special prices created for
particular business partners. Prices are assigned to price lists and to specific business partners.
On top of the basic price list functionality, you can add discounts based on item group,
properties, and manufacturer. You can use special prices to define detailed pricing and discount
structures for a business partner. You can base your discounts on any price list, or simply enter them
manually. Special prices override all other prices.
Page 59 / 87

Price Lists
For price lists, you define discounts based on percentages or quantities. For example, if all your
large accounts have discounted prices since they purchase in larger volumes, you can create a
relationship between pricing levels that updates automatically.
When the system searches for a price, it first looks at special prices. If no special price, it looks
for discount groups. If no discount group, it looks for period and volume discounts. If no period and
volume discount, it uses the basic price list assigned to the business partner.
Page 60 / 87

Price List
Period and Volume Discounts

You can use this function to define special prices for price lists. A special price can apply to a defined
period or to a quantity scale.
In SAP Business One, time-based discounts are defined in the window price list item details by perio
and volume discounts are defined in hierarchies for those validity periods. Add new items to the list by
choosing
Exercise:
a. Create the period discount for a price list assigned to you (i.e. Sales Price Student 1, Sales Price
Student 2, etc.) for items C00001, C00002, & C00003.
b. Under the Period Discount window selects the date with the range of 7 days. Enter 20 in the
discount column.
c. Open Volume Discount window and enter the following:
Qty: 5 Discount: 30
Qty: 10 Discount: 50
d. Create Sales Order for Norm Thompson with items of C00001, C00002, & C00003.
Solution:
1. (1) Inventory > (2) Price Lists > (3) Period and Volume Discounts
2. Select the Base Price in the Price List Field.

3. Select Items C00001, C00002, C00003 in the item field.
4. Right-click on the row 1 then select Period Discounts.
Page 61 / 87

5. Input the 7 days validity, Base Price, & 20% Discount.
6. Double left click on the number 1 row and input the quantity and respective discount based on
the problem.
7. Click update on the Volume Discounts Window.
Page 62 / 87

8. Click Copy Discounts on the Period Discounts window.

9. A system message will appear, then click OK.
10. Click Add on the Period and Volume Discounts window.

11. Let us check if the Period and Volume Discounts will take effect using the SALES ORDER (no need
to add the document).
Note: We used BASE PRICE in the Period and Volume Discounts, so make sure that the BP Master Data is
also in Base Price. Update the Price List if necessary.
Page 63 / 87

Discount Groups
You can define discount groups for a business partner. These discounts are defined by an item group, a
combination of item group properties, or an item manufacturer.
When you use discount groups at the item properties level, SAP Business One allows you to define a
discount for several properties. You can use a rule to decide which discount is used by the system for the
calculation:
The highest discount - The property with the highest discount will determine the overall discount
calculated for the item.
The lowest discount - The property with the lowest discount will determine the overall discount
calculated for the item.
The average discount - The system calculates the average of all the discounts for the properties.
The average is used as the discount.
Page 64 / 87

Discount totals - The system adds together all discounts of the properties that apply to the item.
The total (up to 100%) is used as the discount.
To define discount groups,

1. Choose (1) Inventory > (2) Price Lists > (3) Discount Groups.
2. Select Parameter Technology with BP Code of C23900.

3. Assign 40% Discount to all Group of Items.
4. Click Add.
Page 65 / 87

5. Check in the Item Master Data the Item Type of A00001, A00002, and A00003.
6. Since the items are within ITEMS type, create a Sales Order for Parameter Technology (C23900)
using A00001, A00002, & A00003 with 1 sales order quantity per item. (No need to add the Sales
Order)
Page 66 / 87

Special Prices
Special prices enable you to give a discount or surcharge for a specific business partner.
1. Choose (1) Inventory > (2) Price Lists > (3) Special Prices > (4) Special Prices for Business
Partners.
2. Select the C30000 (Microchips) in the BP Code Field, Distributor Sales Price in the Price List Field.
Page 67 / 87

3. Select the items I00001, I00002, & I00003 in the Item Field, then input 30, 25, & 20 in the
Discount Column respectively.
4. Click Add.
5. Create a Sales Order for Microchips (C30000) and items I00001, I00002, & I00003. (No need to
add the Sales Order)
Page 68 / 87

With special prices, you also have the possibility to assign a different pricelist for selected items to a
business partner. You can copy special prices to other business partners using Inventory > Price Lists >
Special Prices > Copy Special Prices to Selection Criteria.
For copying special prices from one business partner to other ones the following copy rules exist:
Replace All Items:
The system copies all the special prices and possibly overwrites existing ones.
Replace Only Existing Items:
The system overwrites all the special prices that exist in the source business partner (BP) and target BP
records. It does not add any new special prices.
Do Not Replace Items:
The system adds new special prices, but does not change existing ones.
Page 69 / 87

Chapter6 Inventorycycle

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter6 Inventorycycle

Uploaded by

Copyright:

Available Formats

SAP B1 on Cloud Accounting Information System

CHAPTER 6: INVENTORY CYCLE

At the end of this chapter, the student will be able to:

Items and Warehouses

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

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

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

When an item is purchased or sold, warehouse inventory is automatically reduced or increased

Goods Receipt and Goods Issue

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Go to (1) (2) (3) Goods Receipt.

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

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

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Is the item a high value item?

OEC Computers UK received 10 items of SN1000 from Acme Associates.

. Switch to Add mode (Ctrl + A).

5. Click Inventory Data tab.

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Go to (8) Purchasing A/P ) Goods Receipt PO.

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

10. Input the following information:

13. Serial Numbers Set-

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

18. Serial Number for all 10 items should be created.

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

23. Input the following information:

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Master Data. Switch to Add mode (Ctrl + A).

5. Click Inventory Data tab

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

10. Input the following information:

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

13. Batches Set-

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

22. Batches for all 100 items should be created.

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Price Lists and Discounts

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph

SAP B1 9.3 printed on 7/23/2021 10:42 AM

Period and Volume Discounts