Why the Stock Balance in the System Differs from the Physical Count, and How to Fix It

This guide covers the reasons that can make the quantity recorded in the system differ from the quantity actually in the warehouse, and explains how to check and fix each reason. It’s best to review the cases in the order listed, then settle the final difference through stocktaking.

First: how the system calculates the stock balance

A product’s balance is calculated from the total of approved inventory movements only. As a result:

• Pending movements (such as requisitions that are Under Delivery and purchase invoices not received) and movements saved as drafts aren’t included in the balance.
• The current balance isn’t filtered by date; any approved movement, even with a future or past date, affects the current balance as soon as it’s saved.
• The balance is calculated for each warehouse separately, and a staff member sees only the total of the warehouses they’re allowed to view.

Quick checklist

#	Question	Case
1	Are there invoices saved as drafts, or documents that don’t affect inventory, such as estimates and sales orders?	Case 1
2	Are there requisitions with the Under Delivery status?	Case 2
3	Are there purchase invoices that weren’t received?	Case 3
4	Are there POS sessions whose close wasn’t validated?	Case 4
5	Is the product tracked in inventory, and chosen from the products list in invoices?	Case 5
6	Are you reviewing the balance in the correct warehouse?	Case 6
7	Were transfers between warehouses actually recorded?	Case 7
8	Were damaged, lost or internally consumed goods recorded?	Case 8
9	Does the system allow selling when the quantity runs out?	Case 9
10	Were materials received in manufacturing orders before finishing them?	Case 10
11	Were stocktaking sheets adjusted, and the system count updated before the adjustment?	Case 11
12	Is the quantity compared in the same unit?	Case 12

Case 1: Documents that don’t deduct from inventory

The quantity is deducted from inventory only by these documents: an issued sales invoice, a received purchase invoice, refunds, approved requisitions, finished manufacturing orders, and stocktaking after adjustment. The following documents don’t affect the quantity:

Document	Effect on inventory
Invoice saved as a draft	No effect until it’s issued.
Estimate	No effect.
Sales Order	No effect, unless a requisition is created for it and approved.
Debit Note (sales)	No effect on the quantity.
Stock Requests	No effect until you Convert To Requisition and save the requisition.

If goods are delivered to the client based on a sales order or estimate without issuing an invoice, the quantity stays in the system while it has actually left the warehouse.

• Review the unissued documents for the client concerned.
• Convert the sales order or estimate to an invoice, or issue the invoice saved as a draft.

Case 2: Requisitions that weren’t approved

If Requisitions for Sales Invoices or Requisitions for Purchase Invoices is turned on in Inventory & Products Settings, the quantity doesn’t move when the invoice is saved. Instead, a requisition is created with the Under Delivery status, and the quantity isn’t deducted or added until it’s approved. This also applies to the Credit Note and Refund Receipt.

In this case, the goods have actually been delivered to the client, while the quantity is still in the system.

1. Open Requisitions.
2. Filter the list by the Under Delivery status.
3. Open each requisition that was actually delivered or received, then approve it. For a partial delivery, edit the requisition with the actual quantity, then save it.
4. Reject the requisitions that won’t be carried out, so they don’t stay pending.

Case 3: Purchase invoices not received

A purchase invoice’s quantity isn’t added to inventory as long as it’s Unreceived, so the goods are in the warehouse without appearing in the system.

1. Open Purchase Invoices and review the unreceived invoices.
2. Open the invoice and click Mark as Received, or approve the inbound requisition linked to it if requisitions for purchase invoices are turned on.

The same applies to the Purchase Refund: its quantity is deducted only after delivery is confirmed.

Case 4: POS sessions

The effect of point of sale invoices on inventory depends on the Journal Entry Per Invoice setting in the point of sale settings:

Setting	When the quantity is deducted
On	Each invoice’s quantity is deducted as soon as it’s saved, like a regular sales invoice.
Off	The quantity isn’t deducted when selling or when closing the session, but at Validate: an outbound requisition and an inbound requisition for refunds are created with the Under Delivery status, and the quantity moves only after they’re approved.

1. Open POS Sessions.
2. For each session with the Closed status, click Validate.
3. Open Requisitions, and approve the session’s requisitions that are still Under Delivery.

Case 5: Untracked products or manually typed items

Case	Effect
Inventory tracking isn’t turned on for the product	No balance is recorded for it. If you turn it on later, sales made before turning it on aren’t deducted.
The product is defined as a service	It’s not tracked in inventory at all.
The item is typed manually in the invoice without choosing it from the list	It’s recorded as free text not linked to the product, and deducts nothing from inventory.

• Open the product from Products, and make sure Track Stock is turned on in the Inventory Management section.
• Review invoices that contain manually typed items, and replace them with the product from the list.
• After correcting, settle the remaining difference through stocktaking.

Case 6: The quantity is recorded in another warehouse

The movement is recorded in the Warehouse set in the document, or in the warehouse set for each item if Select warehouse per item is turned on. If it isn’t set, the staff member’s or branch’s default warehouse is used. So the quantity may be deducted from a warehouse other than the one the goods actually left, which shows a shortage in one warehouse and an overage in another.

• Open the Summary Of Stock Balance report, and view the balance for each warehouse separately.
• Compare each warehouse’s balance with its actual count, not the total.
• Correct the warehouse in the wrong documents, or record a stock transfer for the difference.
• Review the default warehouses for staff and branches in the inventory settings.

Case 7: Transfers between warehouses

A stock transfer records a deduction from the source warehouse and an addition to the receiving warehouse at the same moment; there’s no “goods in transit” status. As a result:

• If the goods are moved physically without recording the transfer, an overage appears in the source warehouse and a shortage in the receiving warehouse.
• If the transfer is recorded before the goods arrive, the quantity appears in the receiving warehouse while it’s still on the way.

• Record the transfer from Requisitions by creating a Transfer Requisition, or from the Transfer Stock button on the product page.
• Record the transfer with the actual move date.

Case 8: Damaged, lost or consumed goods

The system doesn’t know about goods that are damaged, expired, lost, taken for internal use, or given as free samples, unless they’re recorded with a document. These are among the most common causes of shortages.

1. Open Requisitions, then create an Outbound Requisition.
2. Choose the warehouse, products and quantities.
3. Choose the right account (such as a damaged goods or expenses account) to record the cost on.
4. Save the requisition; the quantity is deducted immediately.

If requisitions aren’t enabled, you can use the Deduct Transaction button on the product page.

Also note that the Credit Note and Refund Receipt always return the quantity to inventory. If the returned goods are damaged and didn’t go back to the warehouse, record an outbound requisition for them after the refund.

Case 9: Allowing negative inventory

The Negative Inventory setting in the Product Tracking section of Inventory & Products Settings decides whether the system allows selling when the quantity runs out:

Option	Effect
Disable negative inventory for all items	Prevents selling more than the available quantity.
Allow for trackable quantities only	Allows a negative balance for regular products.
Allow for all items	Allows a negative balance for all products, including those tracked by serial number or lot.

When negative inventory is allowed, a product may be sold before its purchase is recorded, or the wrong product may be chosen in the invoice, so one product shows a negative balance and another shows an overage.

• Review products with a negative balance in the Summary Of Stock Balance report.
• Check for purchase invoices for them that weren’t recorded or weren’t received.
• Check that a similar product wasn’t chosen by mistake in the invoices.
• Turn on Disable negative inventory for all items to prevent this from happening again.

Case 10: Manufacturing orders

• Materials are deducted only when you click Receive Materials and save the resulting outbound requisition.
• The finished product is added only when you Finish Manufacturing Order.
• The system allows finishing a manufacturing order without receiving the materials, showing only a warning message; in this case, the finished product is added without deducting the materials, so the materials show an overage in the system.

• Review finished manufacturing orders, and make sure each one has an outbound requisition for the materials.
• If it doesn’t, click Undo Completion, then Receive Materials, then Finish Manufacturing Order again.
• Review manufacturing orders that are In Progress whose production is actually complete, and finish them.

Case 11: Incomplete stocktaking

• A stocktaking sheet saved as a draft doesn’t change the quantity; it changes only after you click Adjust.
• The System Count is saved at the moment the product is added to the stocktaking sheet, and it isn’t recalculated automatically at adjustment. If sales or purchases are recorded between counting and adjusting, the adjustment is calculated on an old number.
• If Calculate System Count Based on Stocktaking Date isn’t turned on, the system count is calculated from all movements, including those recorded with a date after the stocktaking date.

1. Open Stocktakings.
2. Open the stocktaking sheet, then click Update next to the System Count and choose Update All right before adjusting.
3. Make sure you entered the actual count for all items.
4. Click Adjust.

Case 12: Different units and bundled products

Case	Explanation
Multiple units	The balance is stored in the base unit. If the balance is 120 pieces and the actual count is 10 cartons of 12 pieces, the two balances match even though the numbers differ. Make sure you compare in the same unit.
Bundled product (Pack)	It’s deducted from the bundled product’s own balance when sold, and its components are deducted only when its assembly is recorded.
Bundled product (Compound)	It’s deducted first from the bundled product’s balance, and when that runs out, its components are deducted automatically.

Other cases

Case	Explanation
Deleting or restoring an invoice	Deleting cancels the invoice’s effect on inventory. When restoring it with requisitions turned on, a new requisition is created with the Under Delivery status, which needs to be approved.
Editing an old invoice	Editing the quantity or warehouse in a previous invoice recalculates its effect, which may change a balance that was already counted.
A document with the wrong date	The date doesn’t change the current balance, but it changes the balance in period reports, and may affect stocktaking calculated by stocktaking date.
Products tracked by serial number or lot	The product total may match, while quantities differ between serial numbers or lots if the wrong number or lot was chosen when selling.

Steps to check a specific product

1. Open the product from Products, and review the stock transactions tab.
2. Compare each movement with the actual document (invoice, requisition, transfer), and look for a missing, extra, or wrong-warehouse movement.
3. Review Requisitions for requisitions Under Delivery for this product.
4. If Show Both On-hand And Available Stock Of Products is turned on, review the Pending Stock column in the Summary Of Stock Balance report.
5. After fixing the causes above, settle the remaining difference with a stocktaking sheet.

FAQs

Is there a button in the system to recalculate the balance?

No. The balance is calculated automatically from approved movements. The difference is fixed by correcting documents or through stocktaking.

I issued a sales invoice and the quantity wasn’t deducted. Why?

Most likely because requisitions for sales invoices are turned on and the requisition wasn’t approved, or because the item was typed manually, or because the product isn’t tracked in inventory.

I did the stocktaking and adjusted it, and the balance is still different. Why?

Most likely the system count wasn’t updated before the adjustment, or movements were recorded after the count, or pending requisitions were approved after the adjustment.

How do I record damaged goods?

With an outbound requisition, choosing the right account, as explained in Case 8.