Difference between expense item and inventory item in Oracle.

Expense Item:

• Captive consumption of the organization 
• it will not be transferred (Stockable & Transactable ) to the inventory and
• hence will not hit the inventory valuation account.

Inventory Item:

• it will hit the inventory as well as inventory valuation account and
• it will be used in production of finished goods. 

Difference between expense item and inventory item

Those Item that needs to maintain stock and tracking are inventory Items. Creating unique Item coding for each SKU's

Non-Stock able Items that is direct IN & OUT, are expense items. For such items no need to create Item code for all. Only few codes can be created and in PR & PO description can be change

For example

Inventory items: Machine parts, Raw Materials, Any Trading Items etc

Expenses Items: Assets, services, Projects, consumables (Office Stationery) etc.

You cannot define an item as expense and inventoried at the same time. But you can define the item as inventory item.

And when you want to use it as expense, move it to an expense subinventory.

We need to uncheck the attribute "Asset Subinventory" in the specified subinventory.

You should uncheck the asset flag for that subinventory. Make sure that the subinventory accounts are setup correctly.

The terminology of items is rather confusing from an Purchasing/Inventory point of view:

For easy understanding these will be referred below points.

These Expense Items have attributes checked

a - Purchasable

b - Purchased

These Inventory Expense Items have the following attributes checked

a - inventory item = YES

b - stockable

c - transactable

d - Inventory Asset Value = NO

e - Costing Enabled = No

These Inventory Asset Items have the following attributes checked

a - inventory item = YES

b - stockable.

c - transactable

d - Inventory Asset Value = YES

e - Costing Enabled = YES

As you know "procure to pay" Business Flow start Purchasing requisition till paying to vendors and most important, in all the case the purchase is made for basic element called Items.

As you know there are three types of items:

• Inventory Expense Item
• Inventory Asset Item
• Expense item

INV: Transaction impact Profile option with List of Transaction Types - Date Validation

Below is the list of transactions on which the profile has a control:-
• Sales order staging transfer
• Move order issue
• Move order sub transfer
• Account receipt
• Account alias issues
• Account alias receipts
• Internal order subinventory transfer
• Internal order direct organization transfer
• Internal order staging transfer
• Cycle count adjustments
• Physical inventory adjustment
• Inventory subinventory transfer
• Inventory direct organization transfer
• Miscellaneous issue
• Miscellaneous receipt
• Inter–project Borrow
• Inter–project Payback
• Inter–project Transfer
  
  Below is the list of transactions on which the profile does not have a control:-
• Purchase order receipt
• Return to supplier from stores
• Purchase order delivery adjustment
• Sales order issue Profile has no impact
• WIP assembly return
• WIP cost update
• WIP component issue
• WIP component return
• WIP assembly completion
• WIP assembly scrap
• Internal requisition intransit receipt
• Internal requisition delivery adjustment
• Internal order issue
  
  Creation of Internal Order as such is not controlled by this profile:-
• Standard cost update
• Receipt of customer return
• Rejection of customer returns
• Inventory intransit receipt
• Inventory delivery adjustment
• Update layer cost
• Average cost update
• WIP negative component issue
• WIP negative component return

Consigned Inventory (CI) Vs Vendor Managed Inventory (VMI)

Consignment and Vendor Managed Inventory Module

Consignment Inventory is inventory that is in the possession of the customer,but is still owned by the supplier. In other words, the supplier places some inventory at the customer’s location. The customer purchases the inventory only after he has resold or consumed it. The liability of loss, damage, obsolescence and theft remains with the supplier.

As a manufacturer you may have consignment inventory at your customers and you may also have to contend with consignments from your Vendors. Most ERP systems have difficulty with consignment inventory. With consignment inventory the invoicing is not tied to the shipment or receipt transaction. This requires companies to manage consignment inventory with cumbersome time consuming and error prone processes. Typically both the Customer and Vendor maintaining separate spreadsheets. There are several trigger points to the actual ownership transfer and billing transaction:

• Invoice when product is actually used or sold
• Invoice after a pre-defined period is offered
• Invoice when used or after a pre-defined period -which ever comes first
• Invoice when next consignment order is placed,previous is billed
  

Consignment Inventory sent to your Customers

Now you can gain complete visibility into your customers' inventory. The consignment inventory feature is offered as an enhancement to the standard Premises inventory module. With the Premises inventory consignment module, you’ll know what is on hand in your customers' inventory and have the ability to easily transfer the inventory to different locations. Consignment inventory is fully integrated into sales,shipping, accounting and scheduling functions within Premises.

Customer Consignment Inventory lets you plan, order, ship, track and report customer-consigned material, while at the same time deferring invoicing and accounts receivable (AR) transactions.

• Ship products to your customer and retain ownership until the product has been consumed
• Maintain accurate financial physical inventory records from shipment through consumption
• Transfer consignment inventory from warehouse location to Customer Bill Bill to or Customer Ship To (For Dealers or Reps)
• Include Serial or Lot numbers on Packing Slips and Invoices
• Create Transfer packing Slips for all consignments shipped and transferred
• Get online view of consignment inventory on hand a for each customer bill to and ship to
• Relieve the consignment inventory at invoicing
• Obtain consignment reports for valuation,insurance and collateral purposes
• Issue RMA's so customers can return consignment inventory
• Get automatic notification when pre-defined billing date arrives to submit invoice
  

Consignment Inventory received from your Vendors

Now you can gain complete visibility into vendor's consignment inventory located on your premises. Vendor consignment inventory is fully integrated into purchasing,receiving, accounting and scheduling functions within Premises.

Vendor Consignment Inventory lets you plan, order, ship, track and report vendor-consigned material, while at the same time deferring payment and accounts payable (AR) transactions.

• Receive products from your supplier and without transferring ownership until the product has been consumed
• Maintain accurate financial physical inventory records from receipt through consumption
• Include serial or Lot Numbers on all consigned inventory
• Create Receiving Logs for all arriving consignments
• Get online view of consignment inventory on hand and for each vendor
• Create Payment Authorization when product is consumed
• Integrated to Electronic Kanban for re supply triggers
• Create Vendor Return to return consignment inventory
• Get automatic notification when pre-defined billing date arrives to approve payment
• Flexible payment triggers
  

(1) Transferring items from a consignment inventory location
(2) Sending consignment material for outside processing
(3) An adjustment triggered by a Physical Count
(4) When back flushing product from production
(5) When creating the next reorder

Attach Consignment Terms and Conditions Document

It is important when engaging in Consignment practices to accurately document all terms and conditions. There will likely be thousands or tens of thousands of dollars at risk and disagreements can be expensive to resolve.

Ensure the following issues are covered in the terms and conditions:

• Who manages security and access?
• Who pays for damage, loss, shrinkage or theft?
• What activity triggers the transfer of ownership and invoicing of consigned inventory?
• What physical access frequency does the vendor have to inspect inventory on hand?
• Who maintains insurance coverage?
• Steps vendors will take to protect consigned product from customer’s creditors or bankruptcy
  

Vendor Managed Inventory programs have the potential to deliver huge benefits to both the supplier and vendor by improving material availability while decreasing overall inventory levels across the supply chain.

Inventory Pending Transaction to View and Resubmit

Inventory Pending Transaction

When you resolving and working with Pending Transactions users must collect and identify data in order to address the source product and complete the Period Close process.

Hence the key steps for resolving pending transactions are:

>>> Locate the transactions
>>> Find the error message to determine what is preventing the transactions from processing.
>>> Resolve the error
>>> Resubmit the pending record.
Nav: Inv → Transaction → Pending Transaction
Perform to resubmit all Pending Transaction through find form enter the proper value and (B) Find → view the pending Transactions summary details below screen
Resubmit the all pending transaction from → Tools → Submit all
or
Perform to resubmit a single line pending transaction choose the line and resubmit for that particular pending transaction line only.


 
Users can see the number of pending transactions by navigating to the Inventory Accounting Periods Form.
Nav: Inv → Accounting Close Cycle → Inventory Accounting Periods
Place cursor on the appropriate open accounting period and click on the [Pending] Button. There are three zones titled “Resolution Required” ,“Resolution Recommended” and “Unprocessed Shipping Transactions”.



Resolution Required:

1. Unprocessed material - This Transaction is exist for this period
   
   >>> This message indicates you have unprocessed material transactions in the MTL_MATERIAL_TRANSACTIONS_TEMP table. You are unable to close the period with this condition.
   >>> Inventory considers entries in this table as part of the quantity movement.
   >>> Closing the period in this situation is not allowed because the resultant accounting entries would have a transaction date for a closed period.
2. Uncosted material - This Transaction is exist for this period
   
   >>> This message indicates you have material transactions in the MTL_MATERIAL_TRANSACTIONS table with no accounting entries (Standard Costing) and no accounting entries and no costs (Average Costing).
   >>> These transactions are part of your inventory value.
   >>> Closing the period in this situation is not allowed because the resultant accounting entries would have a transaction date for a closed period.
   
3. Pending WIP costing - This Transaction is exist in this period
   
   >>> This message indicates you have unprocessed resource and overhead accounting transactions in the WIP_COST_TXN_INTERFACE table. You are unable to close the period with this condition.
   >>> These transactions are in your work in process value, and awaiting further processing.
   >>> Closing the period in this situation is not allowed because the resultant accounting entries would have a transaction date for a closed period.
   

Unprocessed Shipping Transaction:

1. Pending Transactions - This Transaction is exist for this period
   
   >>> “Pending Transactions” in the Unprocessed Shipping Transactions zone indicate there are transactions in the WSH_DELIVERY_DETAILS table in a status of shipped.
   >>> Closing the period in this situation is not allowed because the resultant accounting entries would have a transaction date for a closed period.
   

Resolution Recommended:

1. Pending receiving - When you use Purchasing,
   >>> This message indicates you have unprocessed purchasing transactions in the RCV_TRANSACTIONS_ INTERFACE table. These transactions include purchase order receipts and returns for inventory. If this condition exists, you will receive a warning but will be able to close the accounting period.
   >> These transactions are not in your receiving value. However, after you close the period, these transactions cannot be processed because they have a transaction date for a closed period.
   
2. Pending material - This message indicates you have unprocessed material transactions in the MTL_TRANSACTIONS_INTERFACE table.
   >>> If this condition exists, you will receive a warning but will be able to close the accounting period.
   >>> These transactions are not in your inventory value. However, after you close the period, these transactions cannot be processed because they have a transaction date for a closed period.
   
3. Pending move (Shop Floor) - This message indicates you have unprocessed shop floor move transactions in the WIP_MOVE_TXN_INTERFACE table.
   >>> If this condition exists, you will receive a warning but will be able to close the accounting period.
   >>> These transactions are not in your work in process value. However, after you close the period, these transactions cannot be processed because they have a transaction date for a closed period.