Locations, costing, warehouse management and inventory valuation

Maps BC Locations, Bins, Item Ledger Entries, Value Entries, costing methods, cost adjustment, reservations and warehouse configurations to D365 sites, warehouses, InventTrans, inventory model groups, inventory close, marking, and the physical/financial update model.

What you will be able to do

• Classify every BC Location as a D365 site, warehouse or location and decide basic versus advanced warehouse management
• Explain why Item Ledger Entries and Value Entries do not map row-for-row into D365 InventTrans
• Map BC costing methods to D365 item model groups and describe the inventory-close differences
• Design the on-hand opening load at the correct grain and sequence it within the canonical wave model
• Identify the reconciliation gates that prove inventory quantity and value equivalence between source and target

Introduction

Business Central's inventory model rests on two foundational tables: the Item Ledger Entry, which records every physical quantity movement, and the Value Entry, which records every financial valuation event.

Locations, sites and warehouses

The Location card carries address, warehouse-process flags (Require Receive, Require Shipment, Require Put-away, Require Pick, Directed Put-away and Pick, Bin Mandatory) and default bin codes.

Bins, zones and warehouse locations

In BC, a Bin is a storage slot within a location. Bins are enabled by setting "Bin Mandatory" on the Location card. Bins can be further organised into Zones (receiving zone, storage zone, shipping zone) and assigned Bin Types (receive, put-away, pick, ship).

Warehouse setup: basic versus advanced

Basic warehousing — transactions post directly. Inventory is tracked by site + warehouse (+ optionally location via WMSLocation). No licence plates, no work execution, no wave processing.

Item Ledger Entries and Value Entries

In BC, every inventory movement creates an Item Ledger Entry (ILE). Each ILE carries:

Costing methods and inventory model groups

The Adjust Cost – Item Entries routine (report 795, codeunit 5895) traverses the application chain and propagates cost changes forward. It runs automatically (when configured) or on demand and adjusts both expected and actual costs.

Item application and marking

In BC, the Item Application Entry table links receipt ILEs to issue ILEs. The Adjust Cost routine follows these links to propagate cost from receipts to issues. Applications can be:

Reservations

BC stores reservations in the Reservation Entry table as positive/negative pairs:

On-hand opening load

The opening inventory load must capture on-hand at the grain that D365's dimension model requires:

Reconciliation and the first inventory close

Post the counting journal. Verify InventSum quantities match the source snapshot. Run inventory close for the opening period. Verify cost amounts — the close should produce no adjustments on opening receipts (they have no paired issues yet).

Wave sequencing for inventory positions

Inventory positions sit at Wave 4 — Inventory positions in the canonical eight-wave model:

Knowledge check

Summary

Business Central's inventory model centres on Item Ledger Entries and Value Entries linked through item application — a chain-based evidence model where costs propagate forward continuously.