Lesson 4 of 6
Posting differences and correcting stock
7 min
Once a count is accepted, the difference is posted. This is the moment the book inventory changes, and with it the inventory value in finance. Everything up to now was preparation; this step creates a material document and a journal entry that the auditors will look at.
Posting the difference
In SAP GUI, MI07 posts differences for a document (you can also post count and difference together in one step). In Fiori, the Post Inventory Differences app does the same. SAP posts a goods movement for each item with a difference, using physical inventory movement types:
| Movement type | Stock type | Used when |
|---|---|---|
| 701 / 702 | Unrestricted use | Count higher / lower than book |
| 703 / 704 | Quality inspection | Count higher / lower than book |
| 707 / 708 | Blocked | Count higher / lower than book |
Physical inventory movement types. They are posted from the physical inventory document, not entered as free goods movements.
A reason code can be required for these movement types, so each difference carries an explanation such as damage, unexplained loss or counting error from a previous period. Contoso makes the reason mandatory; it turns the difference list into something the inventory controller can analyze.
The journal entry
The difference is valued at the product's valuation price in the plant: the standard price for standard-price products, the moving average price for moving-average products. The offset goes to an inventory difference account determined by account determination for physical inventory.
| Item | Movement | Quantity | Value | Journal entry |
|---|---|---|---|---|
| CMC-RTR-200, 172A | 702 | −12 | $480 at $40 | Inventory difference expense debit $480; inventory (raw materials) credit $480 |
| CMC-ALT-100, 172A | 701 | +2 | $312 at $156 | Inventory (finished goods) debit $312; inventory difference credit $312 |
| Net effect | −$168 | Book inventory now equals the count; the G/L shows the write-off and write-up |
Note the plant valuation. The alternator surplus in Chicago is valued at $156, not Detroit's $150, because valuation is at plant level. Differences in a moving-average product can also shift its moving average price slightly, which is one more reason to check the value, not only the quantity.
Who may post how much
Physical inventory tolerances (Customizing: Define Tolerances for Physical Inventory Differences) set the maximum difference value a user may post per document and per item, by tolerance group. Assigning users to groups means a counter cannot write off $50,000 of alternators, while the inventory controller can. Ask in testing for one posting that is refused because it exceeds the user's limit.
- Accepted countsAll recounts complete, differences reviewed
- Post differencesMI07 or Post Inventory Differences, posting date in the right period
- Tolerance checkUser's tolerance group allows the item and document value
- ResultsMaterial document with 701/702 items; journal entry to inventory difference
- CloseDocument status: completed; last count date updated on the product
Stock corrections outside a count
Not every stock error needs a physical inventory document. If you know the cause, post the movement that describes it. Writing off and writing back on through a count hides the story.
- Received into the wrong storage location: transfer with 311 (one step).
- Received as the wrong product (rotors booked as a similar part): material-to-material transfer posting with 309, if the valuation makes sense.
- Damaged stock that will be repaired: move to blocked with 344.
- Damaged stock that is destroyed: scrap with 551 and a reason.
- Never use initial entry (561) to fix production stock; it creates value without a cause and is usually restricted to migration roles.
What would you do?
After the Chicago count, the inventory controller notices that 40 rotors "missing" from 172A appear as a surplus of 40 in 171B in Detroit's cycle count the same week. What is the best correction?
- Differences post with 701/702 (unrestricted), 703/704 (quality inspection), 707/708 (blocked).
- Values use the plant's valuation price; the offset goes to the inventory difference account.
- Tolerance groups limit the value a user may post per item and per document.
- When the cause is known, post the real movement (311, 309, 344, 551) instead of a count difference.
Check your understanding · not graded
Lesson check
1. Which movement type posts a shortage in unrestricted stock found by a count?
2. Which transaction posts inventory differences in SAP GUI?
3. At what value is a difference posted for a standard-price product?
4. What limits how much difference value a user can post?
5. Rotors were received into 171A but are physically in 171B. What should be posted?