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Quantity Adjustment vs. Counting Journal in D365: Finding the Right Fit for Your Inventory Needs

Beau Schwieso

If you’re anything like me, you’ve encountered inventory discrepancies in Dynamics 365 F&O (because, let’s face it, they happen to the best of us). You might have found yourself asking, Should I use a Quantity Adjustment or a Counting Journal to fix this?


Well, buckle up, because today we’re diving into these two tools and how to use them effectively—plus, there’s a dad joke waiting for you at the end.

What Are Quantity Adjustments and Counting Journals?

Before we dig into the nitty-gritty, let’s set the stage with some quick definitions:

  • Quantity Adjustment: A quick, one-off way to adjust inventory levels directly in D365, often used to fix immediate errors or discrepancies. Think of it as the duct tape of inventory fixes—fast and effective, but maybe not your long-term solution.

  • Counting Journal: A more formal approach to adjusting inventory, tied to a physical count. It’s like balancing your checkbook but for your warehouse—a detailed, documented process that ensures everything adds up.


Quantity Adjustments: Fast Fixes for Small Problems

What It Is

Quantity Adjustments in D365 let you adjust inventory levels quickly without the need for a full counting process. It’s perfect for those “oops” moments when you know something’s off and you need to fix it ASAP.

When to Use It

  • Fixing a data entry mistake (e.g., someone accidentally received 100 units instead of 10).

  • Writing off damaged or lost inventory.

  • Making small adjustments that don’t require a full physical count.

How It Works

  1. Navigate to Inventory Management > Journals > Item Adjustment.

  2. Select the Item Number and specify the site/warehouse.

  3. Enter the adjustment quantity (positive or negative).

  4. Post the adjustment, and voilà—your inventory is updated!

Pros

  • Quick and easy to execute.

  • Perfect for immediate corrections.

Cons

  • Limited audit trail (your boss might ask, "Why did we lose 50 widgets?").

  • Doesn’t align with formal inventory reconciliation policies.


Counting Journals: The Gold Standard for Accuracy

What It Is

A Counting Journal is a structured tool for reconciling inventory discrepancies after performing a physical count. It’s designed for those times when accuracy and documentation are non-negotiable.

When to Use It

  • During regular cycle counts or annual inventory audits.

  • To reconcile discrepancies after a physical count.

  • When you need a clear audit trail for adjustments.

How It Works

  1. Navigate to Inventory Management > Journals > Counting.

  2. Set up a Counting Journal and link it to your warehouse or specific items.

  3. Perform a physical count and record the counted quantities in the journal.

  4. Post the journal to update inventory levels, with differences logged for reporting.

Pros

  • Provides detailed records of adjustments.

  • Helps identify trends in inventory discrepancies.

  • Aligns with best practices for inventory control.

Cons

  • More time-consuming than a quick adjustment.

  • Requires planning and execution of physical counts.


Head-to-Head Comparison

Here’s how Quantity Adjustments and Counting Journals stack up:

Feature

Quantity Adjustment

Counting Journal

Purpose

Quick inventory corrections.

Formal reconciliation after counting.

Use Cases

Fixing errors, damaged/lost stock.

Periodic counts, cycle counting.

Audit Trail

Minimal.

Detailed records and documentation.

Process Complexity

Simple, quick.

More structured and detailed.

Impact on Inventory

Immediate.

Requires input of counted quantities.

Which One Should You Use?

When deciding between Quantity Adjustments and Counting Journals, consider the following:

  • Use Quantity Adjustments for fast fixes that don’t require formal documentation. Think: correcting minor errors, writing off damaged goods, or quick responses to unexpected discrepancies.

  • Use Counting Journals for periodic inventory checks or when you need to document adjustments. They’re essential for enforcing inventory control policies and identifying long-term trends.


Pro Tips for D365 Users

  1. Quantity Adjustments for Emergencies: Keep them to a minimum. If you find yourself doing frequent adjustments, it’s time to revisit your inventory processes.

  2. Leverage Counting Groups: Use counting groups in your Counting Journals to make cycle counts more manageable by breaking them into smaller, more frequent tasks.

  3. Audit Regularly: Even if you’re using Quantity Adjustments, review them periodically to ensure your adjustments align with real-world inventory movements.



Both tools have their place in D365, but they serve different needs. It’s all about finding the right tool for the job.


Quantity Adjustments are your quick fixes, while Counting Journals are your long-term solution for keeping inventory in check.

And Now, the Dad Joke You’ve Been Waiting For

Why did the inventory manager quit his job?

Because he couldn’t count on his team anymore.



DynamicsDad


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