Item Ledger Entry Part One: An Overview of the ILE

In this article, we will discuss aspects of the Item Ledger Entry (ILE), which has been a cornerstone in every version of Dynamics NAV & 365 Business Central (BC). This includes what they are, key fields to consider and how they are represented in Business Central. There are three types of item: inventory, non-inventory and service. This blog is focused on inventory. Subsequent blogs will cover non-inventory and service.

What is an ILE?

An Item Ledger Entry is a record that is created whenever an item is transacted in NAV/Business Central, causing the inventory quantity to change. So, examples of transactions that generate ILE records are:

  • Sale & Sale Returns
  • Purchase & Purchase Returns
  • Output from a Released Production Order
  • Consumption to a Released Production Order
  • Output from an Assembly Order
  • Consumption to an Assembly Order
  • Transfer from Location A to B using a Transfer Order
  • Positive/negative adjustment to inventory from item journals and physical inventory journals

These ILE records are therefore invaluable in establishing the transactional history of an item and are used extensively in the diagnosis of a problem. However, as the ILE details every inventory quantity change, the number of records can be quite unwieldy. Using the standard, powerful filtering system, you can easily filter down to the relevant records. Alternatively, you can analyse the data in Excel. 

Key fields

  • Item No.: specifies the item number in this record
  • Posting Date: the posting date of the ILE record.
  • Entry Type: specifies which type of transaction that the ILE record is created from. For example, a sale, purchase, positive adjustment, negative adjustment, consumption, output.
  • Document Type: specifies what type of document was posted to create the ILE. Typical examples are sales shipments, purchase receipts, sales returns, purchase order returns, transfer shipments or transfer receipts.
  • Document No.: specifies the actual document no. of the record. For example, if the document type was a sales shipment then this would be the posted sales shipment no.
  • Open: specifies when this entry record has been fully applied. When the remaining quantity of the ILE record reaches zero, the ‘open’ field is un-ticked (no). You can filter by product name and the open field to then see whether there is any stock, which can be useful.
  • Quantity: specifies the quantity of units of this item in this record. The quantity is expressed in the base unit of measure elected for that item. For example, a widget has a base unit of measure of PCS (Pieces). If we purchase one box of Widgets which contains 1000 Widgets, then the associated ILE will reference a quantity of 1000.
  • Remaining Quantity: specifies the quantity that still remains to be processed.
  • Location: specifies the location code associated with this record. Something you should be aware of is that the BIN details are not recorded on the ILE.
  • Invoiced Quantity: specifies how many units of the item have been invoiced.
  • Sales Amount (actual): where applicable, specifies the sales amount in local currency.
  • Cost Amount (Actual): where applicable, specifies the adjusted cost in local currency of the quantity being posted.

The following table lists the incoming Entry Types that increase inventory:

How do ILEs look in Business Central?

Let’s have a quick look at a typical ILE record from the Cronus test company:

Looking at the first line, the record was posted on the 01/04/2020, as a sale using a posted sales shipment. The document number and quantity of item ‘1960-S’ are both stated too. The sales amount was £250.20 with an actual cost of £195. The key difference between this record here and that on line six is the latter has a positive quantity of goods, showing an inbound transaction of the relevant item.

The record on line six was posted on the 10/03/2020, as a purchase using a Posted Purchase Receipt of document number 107203 for a quantity of nine of Item ‘1900-S’. The purchase value was £877.50. In this instance, the quantity is positive as the purchase is increasing the inventory. 

Breaking down the two types of ILE

Let’s see how Business Central manages the stock and its costs. Here we will use an example where we have 10 Widgets at a cost of £100. The start of the process is the transaction that increases the inventory within the business.

  • Item No. = Widget
  • Entry Type =Purchase
  • Document type = Purchase Receipt
  • Quantity = 10
  • Remaining Quantity = 10
  • Open = yes

If we sell six Widgets using a sales order, then it will create the sale ILE. Below is an image showing the two ILE types on separate lines.

In this instance the sale ILE will be -6 due to the removal of stock, in the form of a sale. To achieve the sale, we will be consuming the inventory from our original purchase ILE, which now will have a remaining quantity of four. This is because we started with 10 and lost six when the sale occurred. Therefore, this purchase ILE remains open due to a positive figure remaining. However, as this transaction is removing inventory, the Remaining Quantity and Open fields are not used on the sale ILE. Here’s a breakdown of the events detailed above, for the sale ILE:

  • Item No. = Widget
  • Entry Type = Sale
  • Document Type = Sales Shipment
  • Quantity = -6
  • Remaining Quantity = 0
  • Open = No

The purchase ILE will now look like this:

  • Item No. = Widget
  • Entry Type = Purchase
  • Document Type = Purchase Receipt
  • Quantity = 10
  • Remaining Quantity = 4 (10-6)
  • Open = Yes

What if we run out of inventory?

If we then sell another four Widgets, it will create another sale ILE, consuming the last four Widgets from inventory. So now, our original purchase ILE will lose it’s remaining four items and will no longer be open.

Below is a breakdown of the sale ILE:

  • Item No. = Widget
  • Entry Type = Sale
  • Document Type = Sales Shipment
  • Quantity = -4
  • Remaining Quantity = 0
  • Open = no

Our purchase ILE will now look like this:

  • Item No. = Widget
  • Entry Type = Purchase
  • Document Type = Purchase Receipt
  • Quantity = 10
  • Remaining Quantity = 0 (4-4)
  • Open = No (when the remaining quantity equals 0, then the ILE is no longer ‘open’)

Where there are several item ledger entries which are ‘open’, the system will work on a ‘first in, first out’ (FIFO) basis. For example, if you had bought 10 Widgets and another four on an earlier occasion, when it comes to selling them it will sell the ones that have been in stock the longest, first. So here, as we bought the group of four beforehand, it would sell those four first and then six from the group of 10.

This is just a brief introduction into item ledger entries and how the system displays them. If you would like to get in contact with us, click here.

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