I am often asked about when to use a Transfer Journal and when instead to use a Transfer Order in Dynamics 365 for Finance and Operations.
Transfer Orders & Transfer Journals are both used to record or enable stock moving between Locations, Batches or product variants. ‘. The ‘locations’ are better defined as Storage Dimensions such as Site+Warehouse+Location, however for the purposes of this post ‘locations’ will suffice!
Note: An example of the ‘batches or product variants’ statement above might be the scenario when some goods have been received from a supplier, but perhaps wrongly assigned to Batch X, when actually they are from batch Y. You can use a Transfer Journal to ‘move’ the stock into the correct batch!
Transfer Orders vs Transfer Journals – in essence the main difference is that a transfer journal reflects a single action, the stock ceasing to reside in location 1 and then it instantly residing in location 2. Whereas a Transfer Order represents multiple actions that enable stock to move from location 1 to location 2 one step at a time, better representing the physical reality that when stock is moved between places it takes time.
Importantly Transfer Journals enable stock to move both within a warehouse AND between warehouses. Transfer Orders cannot be used for moving stock within the same warehouse.
Transfer Orders enable the following business actions to occur, these are not available when using a Transfer Journal…
- The warehouse team can create & print a Pick List
- The Pick can then be registered to consume stock when its complete, and place the stock in an outbound location awaiting shipment
- The Transfer Order can then be shipped, when its been loaded onto a vehicle
- The stock can be seen as ‘in transit’ in reports.
- The Transfer Order can then be received, when it has arrived at the destination warehouse
So now we understand the differences at least to some degree, lets actually look at what’s involved in creating both types of transfer in D365, and I’ll pass on any tips I think of as we go…………….
How to Create a Transfer Journal in D365FO
To create a new Transfer Journal in D365FO, start from the Module List, select Stock Management (or Inventory Management if your using en-us personal settings) – Then open Journal Entries > Items > Transfer
Its important to remember that in D365FO journals of all types are always made up of 2 components
- Journal Header – allows some limited financial control to be set via the selection of a pre-defined journal name.
- Journal Lines – contains the detail about which item is moving from to which place
The Journal header is created when you select New from the menu ribbon
- Name = I don’t know why we call this the name field, to me its more of a ‘type’ of journal! You need to pre-set some journal names before anything will be available for you to select here.
- Journal Names can be setup in the Stock Management module > Setup > Journal Names and as you can see below, we can setup multiple journal names for use with transfer journals. In my experience people tend to use different journal names to help with reporting later on!
- One thing to watch for is the ‘Reservation’ choice that can be set at journal header level. This controls if stock is reserved for this journal at the point the line is created, even if the journal hasn’t yet been posted… if you use this then don’t leave unposted journals around or you will soon run out of sellable stock in the system.
- Journal = This number should be pre-set for you, it comes from a number sequence that’s assigned to these types of journal in the stock management parameters.
- Description = OK – so here I will make a recommendation from experience, if you are manually creating journals during testing – then add your initials to the end of the description. Otherwise you can just enter something meaningful to yourself such as ‘Moving the Tea Bags’.
- Site = sets the default to be used during journal line creation
- Warehouse = sets the default to be used during journal line creation
- Voucher Series = This is the number sequence that will be used for the financial vouchers that will get created ‘in the background’ when this journal is eventually ‘posted’
- Selection by = I don’t actually know what this does?
- Entry ? anyone help me here?
- Posting ? – anyone help me here?
- New Voucher by = sets trigger points for the creation of financial vouchers
- Change Date = results in 1 voucher per date used in the journal (365Ops – recommended)
- Change Date or Item = triggers a new financial voucher for every line that has a different Date or a different Item number to the prior line.
- Detail Level = This fields defines that level of details that will end up in the related financial vouchers;
- Summary – if more than 1 line on the journal are for the same item+location+date then those lines will be combined in the voucher to a single line with the total line qty (365Ops recommended)
- Details – this keeps each line separate in the voucher
- Delete all lines after posting = This setting can be used to save space and keep D365 optimised, because as soon as the journal is posted these related transactions have been done and deleting these lines wont affect them – its an optimisation option to be considered.
- Offset Account = this is not actually used for transfer order so it is usually greyed out (its shows because this same form is used to create the header of other journal types.)
- Reservation = this controls if stock is reserved for the journal line at the point it is created or not. This defaults from the ‘Name’ selection at the first point of Journal Header creation above.
- Manual – doesn’t reserve stock automatically when the line is created. The risk is that when you later go to post this line the stock you thought you were moving is no longer available to move
- Automatic – this tries to reserve the stock at the point the line is created. Using this is all about timing, if you reserve the stock but then don’t post the journal, the stock remains reserved and unavailable for any other use. Essentially the stock is ring-fenced specifically for this journal line only.
The transfer journal lines are created when you press ‘New’ on the form as below, you will then be able to enter multiple journal lines
These are the typical fields that you may choose, I wont describe every field but will get you started with the most common:
- Date = this populates from the journal header and is typically today, but it might be different depending on circumstances (if you want to catch up on transfers that happened in the past, or if you want to prepare a journal for posting on a future date)
- Item Number = self explanatory
- From Site = this is the site the items need to be on-hand in at the point the journal I posted – so they can be moved – you cannot transfer something that isnt on-hand. If the value here is not changing then ensure both to/from values are the same.
- To Site = this is the site the item will be shown as on-hand in, immediately when this journal is posted. If the value here is not changing then ensure both to/from values are the same.
- From Warehouse / Location – hopefully you get the idea
- To warehouse / location – as above 🙂
- From Batch – this is the current batch number assigned to this specific on-hand qty
- To Batch – this is the batch number you wish to be assigned to this qty when the journal is posted. If the value here is not changing then ensure both to/from values are the same.
- From Stock Status – you can use a transfer journal to keep stock in exactly the same place but changes its stock status – unusual to do it this way but technically possible!
- To Stock Status – as above.
- Quantity – the quantity of this item the above applies to
When you have got all the lines in the journal that you want, i recommends that you validate the journal, before you ‘post’ it.
Now most blogs finish at this point, assuming that everything worked as expected… but as your reading this blog lets assume that like me you learn best by ‘doing it’ and when you do it, it doesn’t always work perfectly.
When you press the validate button and press ok on the form that comes up – the results might look something like this:
A warning has appeared because the validation step has spotted that I had made a mistake in the journal lines, I forgot to enter the ‘From Location’ and the ‘To location’ judging by the error message above.
Easily fixed though – I just entered both as below – and hey presto
I re-ran the validation and this time everything was ok. This is an important step so take the time to read any inflog messages that are shown, they are a lot more informative than they were in older versions of the application.
My final tip for you when working with Transfer Journals is to make use of the ‘Transfer all posting errors to a new journal’ option on the posting form.
- This toggle when set to NO will cause the whole transfer journal to fail posting if any 1 line on the journal has a problem.
- This toggle set to YES, will allow all the lines that are OK to be posted, and only the lines with errors are removed and copied to a new journal, from which you can then investigate the issues.
The final step is to view the posted Transfer Journal – just for self satisfaction, you should see that the tick has been placed in the posted field.
How to Create a Transfer Order in D365FO
Start by opening the Transfer Orders form from the Stock Management (or Inventory Management if your US 😉 module. Select Outbound Orders > Transfer order
This will open the form below, where you can see Transfer Orders that have already been created, and also press ‘New‘ to create your own
Note: This post is going to walk through the way to create a Transfer Order manually, but for your awareness D365FO can also create them automatically based on the output of Master Planning. If your not comfortable with it creating the orders automatically it can also create them as Planned Transfer Orders, allowing you the opportunity to review them, combine, amend and firm them when the time is right. That will be covered in a Master Planning for Replenishment post coming soon!
- In a similar way to a journal, the Transfer Order is made up of 2 parts the header and the lines, on the header you will need fill in
- From Warehouse = where the goods will be picked up from
- To Warehouse = where the goods will be shipped to
- Ship Date = this is the date the goods need to leave the warehouse
- Receipt Date = this is the date the goods are calculated to be received at the target warehouse, if the goods are shipped on the ship date. – The accuracy of this can be improved if you setup the addresses on the warehouse records, and then add the transport time between the postcodes into D365 – but that’s for another post one day.
On the Order lines you will specify the following:
- Item Number = the item you wish to transfer
- Location = this is the location the item will be taken from in the ‘from warehouse’
- Transfer QTY = the quantity to be moved
- Ship Date = defaults from the header, but you can overwrite
- Receipt Date = defaults from the header, but you can overwrite
- Reserve Items Automatically = If this is ticked then as the Transfer Order Line is created, D365 will try and reserve the stock for this line. The reservation is done according to the reservation hierarchy set on the related item record, typically this hierarchy is used to set reservations only at warehouse level, so this allows a later ‘picking’ action where additional detail of exactly which location and batch the item was picked from can be added.
There is more line level information to be found by opening the Line Details tab at the bottom of the page. I wont mention every field but there are a couple of useful ones here:
- Reserve Items Automatically = this works in tandem with the line level flag, so once set on the line, its status is reflected here
- Cross Docking = This flag is set automatically if the Transfer Order has been created using D365FO standard cross docking capability.
- Over Delivery = this is set as a percentage of the line quantity, and tells the target warehouse the amount over the line quantity that is acceptable for this order line. This is really useful when your moving goods such as liquids, gases and products stored by weight, where the precision on the weight is not absolute.
- Under Delivery = The under delivery percentage allowance based on the same rules as above.
Once you have created your Transfer Order and added all the lines you want to move, then you can start to work through the processes mentioned earlier in this post such as Generate a Pick List, Release to Warehouse,Pick Registration, Ship and then later Receive.
- Generate Pick List – this does exactly what it says on the tin! This creates the basic pick list that will later be used by a picker to go into the ‘from warehouse’ and physically pick up the goods.
- Release to Warehouse (optional) – this step is used to take the picking list created above and to generate the required ‘work’ that the users will see on their handheld terminal (HHT’s if your using the D365 Warehouse Mobile App)
- There can be a lot of complexity as to how this work gets created, but as long as your basic setup of location directives is fine then it makes for a very smooth process.
- Pick Registration – this is where the users are telling D365 exactly which items they picked, from which location & batch.
- Shipment – this is where the goods are moved into the ‘transit’ warehouse and the shipment paperwork is created and the goods can be loaded onto a vehicle
I wont go into each step of a transfer order in detail, but there is one topic I wanted to cover, as its often asked about – that is the ‘auto-receipting‘ of Transfer Orders. There is often the case when the 2 warehouses are not geographically apart that the same person ‘receives’ the goods as ‘shipped’ them. In this scenario minising the amount of system interaction needed is preferred.
This is achieved during the ‘Shipment’ activity which can be executed from the menu below.
This opens the form below where you can see I have selected the ‘Auto-Receive’ tick box
When the shipment completes the ‘receipt’ step is done automatically based on the settings in place against the To Warehouse. This has its limitations because as no-one is stating ‘where’ inside that to warehouse the goods were put, the only option available to D365 is to always put them into the default receipt location for that warehouse. This can cause issues if the location is /isnt License plate controlled. So its best you do some testing.
Advanced Warehousing & Warehouse Mobile App
Its pretty normal these days to be using the advanced warehousing capabilities of D365 to generate the ‘work’ (essentially work is Picks and Puts of stock from place A to place B. When work is created it can be viewed on a handheld terminal using Microsoft Warehouse Mobile App for D365. This allows you to execute the Picking Registration, Shipment and Receiving on the HHT without needing to sit in front of a desktop pc.
END OF POST > Please let me know if I have misunderstood the functionality discussed incorrectly, I always welcome feedback.