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Work with reason codes

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Reason codes let you analyze the results of a counting process and any discrepancies that occur during that process. You can specify the reason for doing the count, such as a broken pallet or a stock adjustment that is based on inventory samples.

Before you set up the system, we recommend that you define a strategy for working with reason codes. For example, try to answer the following questions while defining your strategy:

• Should reason codes be mandatory on warehouses?
• Should reason codes be mandatory or optional on some items?
• How many reason codes do you require?
• Do you have to preselect a limited list of reason codes for adjustments?
• How should users of barcode scanners use reason codes? Should the reason codes be preselected, mandatory, or not editable?
• Do warehouse workers require different reason code behavior on mobile scanners? If the answer is yes, you can create more menu items and assign them to different people.
• Should the reason codes drive financial offset account posting?

You can create multiple reason code policies, and each reason code policy can have two counting reason code policies. The counting reason code policies can be used at the warehouse level or the item level.

Warehouse and retail workers making inventory adjustments can select the reason for the adjustment as they work. With a list of possible reasons for adjustment (stolen, expired, or damaged), adjustments can be posted to the appropriate offset account for each reason. This results in the adjustments being automatically posted as a counting journal to the correct account once it's registered.

To set up reason code policies, use the following procedure:

1. Go to Inventory management > Setup > Inventory > Counting reason code policies, and create a new reason code policy.
2. In the Counting reason code type field, select either Mandatory or Optional to specify whether selection of a reason code should be an optional or a mandatory action in one of the following counting journals:
   • Cycle count (mobile device)
   • Spot count (mobile device)
   • Threshold count (mobile device)
   • Adjustment in (mobile device)
   • Adjustment out (mobile device)
   • Counting journal (rich client)

You can also set up reason codes for individual warehouses and for products. The reason code setup for products can disregard the setup for warehouses.

Mandatory reason codes

If the Mandatory parameter is set in the configuration of reason codes for warehouses or items, the counting journal can't be completed and closed until a reason code is provided.

To set up reason codes for warehouses, use the following procedure:

1. Go to Warehouse Management > Settings > Warehouse breakdown > Warehouses.
2. On the Inventory and warehouse management tab, in the Counting reason code policy field, select one of the following options:
   • Blank – The parameter that is set up for the item is used to determine whether counting journals are mandatory for the product.
   • Mandatory – A reason code is always required on counting journals for the warehouse.
   • Optional – A reason code isn't required on counting journals for the warehouse.

To set up reason codes for products, use the following procedure:

1. Go to Product information management > Products > Released products.
2. On the Product tab, select Counting reason code policy, and then select one of the following options:
   • Blank – The parameter that is set up for the warehouse is used to determine whether counting journals are mandatory for the product.
   • Mandatory – A reason code is always required on counting journals for the product. This setting overrides any reason code setting at the warehouse level.
   • Optional – A reason code isn't required on counting journals for the product. This setting overrides any reason code setting at the warehouse level.

Use reason codes in counting journals

In a counting journal, you can add reason codes for counts of the following types:

• Cycle count
• Spot count
• Threshold count
• Adjustment in
• Adjustment out

Reason codes are added to the journal lines in counting journals of the Counting journal type.

1. Go to Inventory management > Journal entries > Item counting > Counting.
2. In the line details of the counting journal, in the Counting reason code field, select an option.

To view the counting history as it's recorded by reason codes, go to Inventory management > Inquiries and reports > Counting history and then, in the Counting reason code field, view the counting history that has been recorded through a reason code.

Use a reason code for a quantity adjustment

To add a reason code for a quantity adjustment, use the following procedure:

1. On the On-hand inventory page, select Adjust quantity. You can open the On-hand inventory page in several ways. For example, select Inventory management > Inquiries and reports > On-hand inventory.
2. Select Adjust quantity and then, in the Counting reason code field, select a reason code.

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