Supply chain | Supply Chain Management, Commerce

Unexpected Inventory and Financial Impact from Quality Order Processing

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Posted on by Ahmed SH

During testing of the Quality Management process in Dynamics 365, it was observed that creating and processing a Quality Order after a Product Receipt resulted in unexpected inventory and financial impact.

Specifically, the system generated inventory issue transactions (Issue status = Sold), leading to a reduction in on-hand inventory. Additionally, corresponding financial postings were recorded between the Inventory account and Inventory variation account.

This behavior occurred during a standard testing scenario (Purchase Order → Product Receipt → Quality Order), without any explicit inventory action such as scrap or manual issue

any idea how we can solve this issue ? and what is the root cause about this issue ?

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Dynamics 365 Supply Chain Management

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André Arnaud de Cal... 303,780 Super User 2026 Season 1 on at

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Hi,

Please provide more information. You mentioned that there was a deduction. Is this for the full quantity or a sample only? What exact settings do you have for the quality management? Is it set as a destructive test?

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Mallesh Deshapaga 1,762 on at

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Is the item model group configured to allow negative inventory transactions? Also, does this issue occur for every order?

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Ahmed SH 6 on at

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Thank you André for your inquiry. Please find the clarification below:

The deduction was applied to the remaining full quantity, not a sample.

The total PO quantity is 8,000. Initially, 1,076.19 was received, leaving a remaining quantity of 6,923.810. This occurred before executing the Quality Control process in the system.

Regarding the Quality Management setup:

Event type: Registration

Item sampling: 100%

Blocking: Full blocking

Per updated quantity: Enabled

After executing the Quality Control process, the system did not allow further product receipt for the same PO due to the active Quality Order. Therefore, it was required to follow the sequence:
Registration → Quality Order validation → Product Receipt

After completing these steps, we observed that the Quality Order triggered an inventory and financial posting, as previously highlighted.

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Ahmed SH 6 on at

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Thank you Mallesh

Yes, the item model group is configured to allow negative inventory.

However, for your information, this issue has not occurred in any other Quality Orders—neither for the same item nor for different items. It appears to be specific to this particular case.

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André Arnaud de Cal... 303,780 Super User 2026 Season 1 on at

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Hi Ahmad,

Can you share screenshots from where you identified it was consuming the items and posted the ledger updates?

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Syed Haris Shah 1,588 Super User 2026 Season 1 on at

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Hi @Ahmed SH,

Could you share the inventory transaction reference type or screenshot of transaction detail?

Regards,

Syed Haris Shah

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