JD Edwards ST/OT transfer orders are used to move materials between branch plants (A to B) within the same company and employ the use of a clearing account to hold the value of the goods while they are in transit. The typical process consists of first performing a shipment confirmation of 1 or more items from branch ‘A’, then receiving in those items at branch ‘B’. Ideally, the received items will match both in quantity and cost between the 2 branches, making for a clean reconciliation of the In Transit account. In many cases, however, reality does not match up with the ideal scenario.
It is common to have multiple transfer orders in process that have the same item number on them. This opens the door for processing discrepancies that make reconciling difficult. For example, let’s say we have 2 transfer orders in process for the same item (50 units each) that are scheduled to ship within a week of each other. Delays or other issues have altered the schedule and now all 100 units have been shipped together. We can assume the ship confirmations happened properly, with 50 on each order.
However, at the receiving dock, the operator counts 100 units in the same box, looks up the item, and receives all 100 units against 1 of the 2 open purchase orders. This will close 1 order but leave the other open in JD Edwards, theoretically never to be received against. When looking at the open PO in RapidReconciler you must ‘Exclude’ it from the In Transit calculations. Once this is done all things are in balance and life goes on as it should. Or does it?
Since there is still an open PO in JD Edwards, there is the potential to receive items against it, even from an unrelated shipment! If this happens the receipt will not be reflected in RapidReconciler because the purchase order had been previously excluded. That’s where ‘Exclusion Variance’ comes into play.
In the picture below you can see there have been 4 new columns added to the orders tab:
1) ExclQty – The Quantity excluded on the order
2) ExclAmt – The amount excluded on the order
3) ExclVarQty – The exclusion quantity variance
4) ExclVarAmt – The exclusion variance amount
The last 2 variance columns are important as they will identify any item activity on orders that have been previously excluded. If there are non-zero amounts on any row, those lines must be ‘Unexcluded’ and ‘Excluded’ again so the quantities and amounts are recalculated correctly. This will ensure an accurate In Transit reconciliation. In theory, if In Transit orders are processed correctly this should never happen. But things don’t always happen as they should. Happy reconciling!
If you have any questions on inventory reconciliation or any other questions for our JD Edwards consulting team, please contact us below.