Expired Inventory Report in D365 Finance and Operations:
Finance:
Finance In today’s fast-paced world of supply chain management, what businesses need is an accurate and efficient inventory system. One of the cornerstones of successful inventory management is knowing the status of your available inventory, allowing you to identify items that are expired or about to expire.
Another valuable feature of inventory management in Microsoft Dynamics 365 Finance and Operations is that it allows you to generate reports on expired inventory. This article will discuss the need for expired inventory reports, how to create them in D365 F&O, and best practices for managing expired inventory.
Importance of Expired Inventory Reports:
Finance:
1. Financial Implications:
The expiration of inventory goes directly to the bottom line. Obsolete or unusable products may capture useful resources and be lost. Periodic follow-ups on expired stock help businesses decide how and when to markdown, write off, or run special promotions to get rid of stale stock.
2. Compliance and Risk Management:
Many industries, including food, pharmaceutical, and chemicals, have very strict rules concerning the dates of expired products. Lack of proper management of expired inventory results in failure to comply, and this leads to product recall, fines, or legal action.
Reporting of expired inventory, therefore, ensures that an entity continues in compliant operation to the regulated needs of its industry.
3. Efficiency in Operations:
Knowing about obsolete products can make operations even more efficient. Removing expired products from storage would help companies improve their storage and eliminate clutter. In short, it leads to an even better organized warehouse management system and increases efficiency in terms of operational efficiency.
4. Customer Satisfaction:
Sometimes, expired stock can be available on the shelf. The existence of these can lead to dissatisfied customers, and this could harm the reputation of a brand. To ensure that their customers only receive the best and safest products, firms need to review expired stock from time to time.
Producing Expired Inventory Reports in D365 Finance and Operations:
Finance:
In Microsoft Dynamics 365 Finance and Operations, you can manage your inventory properly by producing a variety of reports, one of which is the report on expired inventory. There are the following steps to produce an expired inventory report.
Step 1: Accessing Inventory Management:
- Log into D365 F&O: You should log in with the required credentials to gain access to the system.
- Navigate to Inventory Management: Navigate to the main dashboard, and from there, click on the ‘Modules’ and select ‘Inventory Management’
Step 2: Configuring Report Parameters:
Finance:
- Find Reports: Navigate through the ‘Reports’ section in the Inventory Management workspace
- Expired Inventory Report: Select the report option called ‘Expired Inventory’. Note that this might fall under either inventory reports or product reports.
- Add Filters: You can select multiple filters based on criteria such as.
- Location: Select the warehouse or location that you wish to analyze
- Item Number: From specific items to categories
- Expiration Date: Maybe you would like to view items that expire in a month, quarter, etc
Step 3: Running the Report:
- Run the Report: With your criteria selected click on ‘Run’ and your report will be generated.
- Review the Report: The system will capture information regarding expired items, including a description of the item, on hand, and expiration date.
Step 4: Export the Report:
Finance:
- Export Options: After the report is generated, you are offered an option to export it in different formats, PDF.
- Distribute the Report: This report should be distributed for input from relevant stakeholders, such as inventory managers, finance teams, and compliance officers, where such analysis and actions should be implemented.
Best Practices for Expired Inventory Management:
Finance:
Just generating a report on expired inventory is the first step. Here are some best practices to help you better manage your expired inventory.
1. Maintain Regular Monitoring:
Finance:
Identify a regular cycle to run backorder and obsolete inventory reports—monthly or quarterly based on the nature of business and speed of inventory turnover. Consistent checks allow speedy exposure and management of expired products.
2. Integrate FIFO and FEFO Policies:
- FIFO (First In, First Out): Vendors should sell older stock before newer stock to reduce the chance of expired products.
- FEFO (First Expired, First Out): This is particularly crucial in industries like food and pharmaceutical. Focus on the expiration date helps to manage the stock level and reduces waste.
3. Train the Staff:
Finance:
Proper education of the warehouse and inventory staff regarding the need to manage expiration dates is required. The employees need to know how to handle stock and the implications of expired products on business operations.
4. Installing Alerts and Notifications:
Alert features in D365 F&O are used to notify officers concerned that a specific item is reaching its expiry dates. This way, proactive steps will be in place to avoid overspending on products meant to be used before they expire.
5. Root Cause Analysis:
Finance:
If the percentage of expired inventories is seriously high, determine the root causes for such occurrences as this shall bring to light inefficiencies that are going on within the processes or even the purchasing practices.
6. Modification of Purchasing Practices:
From the reports on expired inventories, you should alter the purchasing patterns so that you don’t buy products that have shorter shelf lives as soon. You and the supplier can discuss what method can be adapted where the levels of inventory are better aligned to real demand.
7. Disposal Process of Obsolete Inventory:
There must be a proper process for discarding obsolete inventories. This would encompass following the statutory requirements about the safe disposal of products, especially in businesses where the regulation of compliance runs high.
8. Analytics:
Analytically, D365 is used to understand trends within inventories. Understanding when most of your items have a likelihood of expiring can help in changes in procurement and sales strategies.
Conclusion:
Finance:
In conclusion, obsolete inventory management is important in the D365 Finance and Operations inventory management framework. When companies report obsolete inventory, it helps reduce potential financial risks, ensure compliance with all regulations, and optimize operations.
Best practices such as regular inspections, staff training, and leveraging technological capabilities are used to promote a more effective inventory management strategy. Today, and in the near future, introducing innovations in inventory management remains one of the strategies that promote success.
By focusing on expired inventory management, organizations protect their bottom line but also ensure that there is increased customer satisfaction and a wholesome image maintained in the marketplace.
