Inventory Management

What is the Inventory Module?

The Inventory module provides real-time visibility into your stock across all physical and virtual locations -- warehouses, free zones, project sites, and in-transit. It tracks every stock movement (goods in, goods out, transfers, and adjustments) with full traceability back to the originating document. Supporting both FIFO and weighted average valuation methods, the module gives your finance team accurate cost-of-goods figures at any point in time. Automated reorder point alerts ensure you never run out of critical materials, while aging analysis highlights slow-moving stock that ties up working capital.

How It Connects

Direction	Connected Module	Relationship
In <--	GRN (Goods Receipt)	Accepted goods from GRNs increase stock levels
In <--	Products	Product catalog defines the items tracked in inventory
Out -->	Purchase Orders	Reorder alerts can trigger new PO creation
Out -->	Projects	Stock is reserved or issued against project requirements
Both	Shipments	In-transit inventory is tracked as a virtual location until delivery confirmation
In <--	Returns	Customer or supplier returns adjust stock quantities

Step-by-Step Guide

1. Set up locations -- navigate to Operations > Inventory > Locations. Create your physical locations (e.g., "Dubai Main Warehouse", "JAFZA Free Zone", "Abu Dhabi Project Site") and the system-managed virtual location "In Transit".
2. Define reorder points -- for each product, set the minimum stock level (reorder point) and reorder quantity. Go to the product record or use Inventory > Reorder Settings for bulk configuration.
3. Receive stock -- stock is added automatically when a GRN is submitted with accepted quantities. The inventory module records the movement as type IN with a reference to the GRN.
4. Issue stock -- when materials are needed for a project or customer order, create a Stock Issue from Inventory > Issue Stock. Select the location, product, quantity, and the destination (project, customer, or internal department).
5. Transfer stock -- move inventory between locations using Inventory > Transfer. Select source location, destination location, products, and quantities. The system creates paired OUT and IN movements.
6. Adjust stock -- for corrections (damaged goods, inventory count discrepancies, write-offs), create a Stock Adjustment with a reason code. Adjustments require approval based on the value threshold.
7. Run stock takes -- periodically verify physical stock against system records using Inventory > Stock Take. The system generates a count sheet, and you enter actual quantities. Discrepancies are resolved as adjustments.
8. Monitor dashboards -- use the inventory dashboard for real-time views of stock levels by location, reorder alerts, aging analysis, and valuation summaries.

Stock Movement Types

IN (GRN, Return, Adjustment+)  -->  Increases stock
OUT (Issue, Transfer Out, Adjustment-)  -->  Decreases stock
TRANSFER (paired OUT + IN)  -->  Moves between locations
ADJUSTMENT (+ or -)  -->  Corrects discrepancies

Multi-Location Stock View Example

Product	Dubai Warehouse	JAFZA Free Zone	In Transit	Site A	Total	Reorder Point	Status
Cable 4mm (m)	2,500	800	1,200	300	4,800	1,000	OK
MCB 32A	45	0	100	10	155	200	Below Reorder
LED Panel 600x600	0	50	0	5	55	100	Critical

Key Fields Explained

Field	Description
product	The catalog item being tracked. Links to the Products module for specifications and supplier mapping.
location	Physical or virtual storage location where the stock resides.
current_qty	Actual available stock at this location right now.
reserved_qty	Quantity allocated to approved POs or project requirements but not yet physically moved.
in_transit_qty	Quantity currently being shipped (tracked via Shipments module).
available_qty	Calculated field: current_qty - reserved_qty. The quantity actually available for new allocations.
reorder_point	Minimum stock threshold. When available_qty falls below this, an alert is triggered.
reorder_qty	Suggested quantity to order when the reorder point is breached.
valuation_method	FIFO (First In, First Out) or Weighted Average, set per product or globally.
unit_cost	Current unit cost based on the selected valuation method.
total_value	current_qty x unit_cost -- the inventory value at this location.
last_movement_date	Date of the most recent stock movement for this product at this location.
aging_days	Days since the oldest unit of this product was received (FIFO) or last movement (weighted average).

Valuation Methods

Method	Calculation	Best For
FIFO	Oldest stock is costed out first; remaining stock valued at most recent purchase prices	Products with price volatility or expiry concerns
Weighted Average	Total cost of stock / Total units recalculated after each receipt	Commodities, fasteners, and items with stable pricing

Tips & Best Practices

TIP

Set up reorder point alerts for all critical materials immediately after go-live. Navigate to Inventory > Reorder Settings and use the bulk editor to configure minimums based on your average monthly consumption and supplier lead times.

WARNING

Stock adjustments bypass the normal procurement workflow and directly alter your inventory value. Always require approval for adjustments and ensure a reason code is provided. The system logs all adjustments with the user, timestamp, and reason for audit purposes.

TIP

Use the aging analysis report monthly to identify slow-moving stock. Items sitting in inventory for more than 90 days without movement are highlighted. Consider returning excess stock to suppliers, transferring to other locations, or writing off obsolete items.

TIP

Conduct cycle counts (partial stock takes targeting a subset of products each week) rather than a full annual stock take. This maintains accuracy year-round and is less disruptive to operations. Configure cycle count schedules in Inventory > Stock Take > Schedule.

WARNING

Changing the valuation method (FIFO to Weighted Average or vice versa) mid-period will recalculate all stock values retroactively. This should only be done at the start of a fiscal year with finance team approval.

FAQ

Q: What is the difference between "current" and "available" quantity? A: Current quantity is the total physical stock at a location. Available quantity subtracts reserved quantities (allocated to POs or projects but not yet issued). Always check available quantity before committing stock to new orders.

Q: How does in-transit inventory work? A: When a shipment is created and moves to "In Transit" status, the ordered quantity is recorded in the virtual "In Transit" location. It is visible in reports but cannot be issued or reserved until the shipment is delivered and a GRN is completed.

Q: Can I set different reorder points for the same product at different locations? A: Yes. Reorder points are configured per product per location. A high-volume warehouse may have a reorder point of 500 units, while a small project site may have a reorder point of 50 for the same product.

Q: How are stock adjustments audited? A: Every adjustment is recorded with the user who initiated it, the approver, the timestamp, the reason code, the old quantity, the new quantity, and any attached supporting documents (e.g., inventory count sheets, damage photos). Adjustments above a configurable value threshold require manager approval.

Q: Does the system support batch or serial number tracking? A: Yes. Products can be configured for batch tracking (groups of units with a common lot number) or serial number tracking (individual unit tracking). This is configured in the product record under Tracking Method.