Extending Business Central for 3PL operations with Boltrics

Psssstt warehouse managers, you know how essential accurate inventory management is when managing a warehouse. In fact, journals play a crucial role in this by ensuring that all stock movements are recorded correctly with full visibility.

But how does a journal work and how does it affect your inventory management? 

In this blog, we dive into what 3PL is, the different types of journals, and how they help to correct errors and optimize inventory. 

First: What is a 3PL?

First of all- let’s start with the basics. 3PL stands for third-party logistics. A 3PL, or third-party logistics provider, is an organisation that manages logistics activities on behalf of another business. 

These activities may include receiving goods, storing inventory, picking and packing orders, managing internal warehouse movements, and arranging outbound shipments. 

Rather than owning the goods themselves, the 3PL is responsible for ensuring that its customers’ inventory is accurately recorded, stored and managed throughout the logistics process.

This means that inventory accuracy has a direct impact on the service provided to customers. A discrepancy in the warehouse system may affect stock availability, order fulfilment, billing, reporting and customer relationships. 

Inventory may contain the correct number of units while being associated with an incorrect lot number, container number or other inventory attribute.

Hence, a modern 3PL warehouse needs to maintain an accurate digital representation of the physical inventory on the warehouse floor. 

Inventory journals are one of the mechanisms that can support this process, which we’ll look at below.

What is an inventory journal?

Put simply, an inventory journal is a controlled way of recording a change to inventory information.

Some inventory changes happen naturally as part of warehouse operations. For example, when goods are received, shipped, or moved, the corresponding inventory records are updated.

But warehouse operations don’t always go exactly according to plan.

You might discover that:

• A pallet contains 105 units instead of the 100 recorded in the system.

• A container number was entered incorrectly.

• A physical count reveals missing or additional stock.

• Inventory needs to be transferred or reclassified.

• A previous inventory adjustment needs to be corrected.

Rather than changing information without a clear record, journals provide a structured way to make these adjustments.

Inventory journals play an important role in this process by providing a structured mechanism for managing adjustments, physical inventory discrepancies and changes to inventory information. 

In Business Central, inventory journals can be used for activities such as physical inventory counts, quantity adjustments, and reclassification of inventory attributes.

For 3PL operations, this creates an important connection between what is physically happening in the warehouse and what your system says is happening.

When should you use an inventory journal?

One of the most common challenges in warehouse operations occurs when the physical quantity of inventory does not correspond with the quantity recorded in the system. 

1. Physical Inventory Carrier Journal: When the physical count doesn’t match

Imagine a pallet arrives at your warehouse containing boxes of a customer’s product.

Your system records 100 boxes. During a physical count, your warehouse team discovers there are actually 107.

What happens next? The difference needs to be recorded so that the system accurately reflects the physical inventory.

A physical inventory process provides the means to identify this discrepancy, while the appropriate journal can be used to record the resulting adjustment. 

Business Central supports physical inventory processes that allow warehouse teams to compare recorded inventory with the quantities physically present and subsequently adjust the system where necessary.

Boltrics extends this concept for 3PL operations through functionality such as the Physical Inventory Carrier Journal, which can be used to adjust inventory quantities associated with handling units or carriers such as pallets. 

The important principle is that inventory discrepancies should be managed through a controlled process. While correcting the quantity is an important part of the task; maintaining a reliable record of the adjustment is equally important for inventory traceability and accountability.

2. Item Transfer Journal: When the inventory information is wrong

Inventory accuracy in a 3PL environment also depends on the accuracy of the information associated with each item.  

Not every inventory problem is about quantity. Sometimes the physical stock is perfectly correct, but the information attached to it is not. E.g: a warehouse operator may discover that the wrong container number was entered into the system.

The inventory doesn’t need to be physically replaced. Instead, the relevant information needs to be corrected.

The Item Transfer Journal can be used for physical inventory movements as well as changes to certain inventory data, such as a container number. Boltrics uses the “New Container No.” field as one example of this type of correction.

This distinction is key:

• Quantity adjustment:
  “We have the wrong number of items recorded.”

• Inventory information adjustment:
  “The number of items is correct, but the information associated with them is wrong.”

For a 3PL warehouse, both situations matter.

3. Item Journal: Adding or correcting inventory

The Item Journal can be used to add inventory to the system or make certain inventory corrections.

E.g: Inventory can be entered directly into the journal or imported from Excel. Boltrics also highlights its use for correcting inventory that was previously charged off incorrectly.

However, because item journals can affect inventory quantities and potentially accounting records, accuracy is important when entering the information.

In other words: A journal gives you flexibility you need, but that flexibility should come with reliable control.

Why this matters to your customers

If you’re a logistics service provider, maintaining inventory accuracy is your job and ultimately a customer-facing issue.

While a product may appear to be defined simply by its stock keeping unit (SKU) and quantity, customers expect their 3PL partner to provide reliable information about the inventory being stored on their behalf. I.e: what stock is available, where it is located, and whether the information associated with that stock can be trusted.

A well-managed inventory journal process achieves this by ensuring that adjustments and reclassifications are handled systematically rather than through informal or disconnected methods.

More importantly, transparency is not compromised. When an inventory discrepancy occurs, the objective should not simply be to tally the figures. But instead, also be able to understand why the discrepancy occurred, what was changed, and how the resulting inventory position was established.

This is particularly valuable as 3PL operations become increasingly complex and customers expect greater visibility into their supply chains.

Hence, effective 3PL inventory management requires both quantity accuracy and attribute accuracy. This is where journals can provide a structured mechanism for correcting these details when discrepancies are identified.

Extending Business Central for 3PL operations

For businesses already using Microsoft Dynamics 365 Business Central, the transition to a 3PL-focused warehouse management environment has never been easier

Business Central provides a strong foundation for financial management, inventory management and business operations, including standard functionality for inventory adjustments, physical inventory and reclassification. 

The challenge for a 3PL provider is that logistics operations introduce additional requirements. Inventory is managed on behalf of multiple customers, while warehouse teams must manage handling units, containers, product characteristics and customer-specific requirements.

Boltrics 3PL Dynamics is built on Microsoft Dynamics 365 Business Central and extends the platform with functionality designed for logistics service providers. Its 3PL-specific journal capabilities help address practical warehouse scenarios such as physical inventory adjustments, inventory transfers and changes to inventory information.

For existing Business Central users, this provides an opportunity to build upon what you already have while introducing warehouse functionality that is more closely aligned with the 3PL logistics requirements. 

From inventory accuracy to operational confidence

Effective inventory management is ultimately more than maintaining accurate quantities in a system. It is about ensuring that inventory information remains reliable, traceable and aligned with the physical reality of the warehouse.

When combined with regular inventory counting and appropriate warehouse processes, they can help 3PL providers maintain stronger control over the accuracy of their inventory records.

If your organisation is already using Microsoft Dynamics 365 Business Central and is looking to strengthen its warehouse and 3PL capabilities, look no further- Boltrics 3PL Dynamics provides a robust logistics-focused extension designed around the operational realities of third-party logistics.

Schedule a free demo with our expert Aristou team here to explore how Boltrics 3PL Dynamics can support your existing Business Central environment and your wider warehouse operations!