Efficiently managing inventory in an ERP system is crucial for organizations, especially the ones that have fluctuating stock levels on a regular basis. There often arises a need for flexibility in inventory management while dealing with orders that pass current stock levels. Microsoft Dynamics 365 Finance and Operations renders a top-notch feature to deal with such scenario – enable Physical Negative Inventory in D365 F&O. This feature enables enterprises to create sales orders even in a situation where there is insufficient physical stock.
The blog reflects the meaning of physical negative inventory, its importance, and how to enable negative inventory in Dynamics 365 for Finance & Operations.
Physical Negative Inventory refers to a situation in which a company has insufficient physical stock on hand but still processes the stock transactions. This means the system allows the company to ship, transfer, or even sell the inventory even though it is physically not available in the warehouse. The main reason for this may be any kind of delay in receiving the goods or other issues in the stock counts.
Maintaining negative inventory is not good or ideal for long-term inventory management. It is beneficial for short term flexibility and enterprises can use this capability in scenarios where operational flow is of higher importance as compared to real-tome stock accuracy.
Some enterprises face situations where they have to fulfill customer orders even when they have insufficient inventory on hand. There can be various reasons for this, including stockouts, pending stock arrivals, etc. Enabling physical Negative Inventory can be helpful in various situations like:
Enabling physical negative inventory in D365 F&O is a very simple and easy process. But it must be performed carefully. Incorrect usage of this feature can lead to inaccurate reports and confusion in stock levels. This is how you can enable physical negative inventory in Dynamics 365 Finance and Operations:
The first step is to go to the Inventory and Warehouse Management module in your D365 F&O. Then go to “Inventory Parameters.”
The third step is to configure item model groups in such as way:
After enabling this feature, test the configuration by performing a few transactions to ensure that everything works fine without any errors or discrepancies.
Microsoft Dynamics 365 renders other key features that can add more to your inventory management. For instance, enterprises often need to enable quarantine order D365 Finance and Operations to ensure high quality is maintained. They also need this feature to seamlessly track and manage damaged items before they enter the main inventory. In the same way, enterprises may need to add negative charges in Dynamics 365 F&O. This outstanding feature enables them to account for any unexpected expenses or adjust inventory transactions. All these features help you to increase operational efficiency while precisely managing finances.
By enabling Physical Negative Inventory in Dynamics 365 Finance and Operations, enterprises have the flexibility to operate smoothly even with highly fluctuating inventory and stock levels. However, it is equally essential to maintain an accurate inventory record and balance this flexibility by checking it. By following the steps mentioned above, you can enable physical negative inventory in D365 F&O. Enterprises must remain vigilant to avoid any kind of discrepancies and financial inaccuracies.
Understanding the benefits and risks of enabling physical negative inventory in Dynamics 365 Finance and Operations, organizations can maximize the impact of this win-win feature. They can enhance efficiency and accuracy in their stock management.
Still struggling with enabling physical negative inventory in Dynamics 365 F&O? DynaTech Systems has team of skilled professionals who can help you with all kinds of Dynamics 365 solutions. Enable your setting today!