Inventory Disbursement Based on Total Inventory or Actual Inventory Quantity

When activating the warehouse requisitions, sellers can issue products in invoices and point-of-sale receipts while keeping the requisition pending until approved.

Consequently, product quantities in the inventory do not decrease until the permissions related to them are approved. This means there is sometimes a gap between the products sold and the quantity in the inventory. What if you wanted to reserve the quantity of the dispensed product in invoices and point of sale before approval of the requisition?

You can now control this by setting up inventory valuation based on actual inventory quantity.

By activating the control setting for the inventory validation method, you can track the reserved inventory quantity of the product due to a sales invoice before requisition approval. However, the difference lies in the action taken regarding this quantity of the product.

You can choose to validate based on:

• On Hand Stock: Here, the reserved quantity of the product appears in its respective file, but you won’t be prevented from selling or transferring this quantity of the product despite it being reserved.

 

• Available Stock: Here, issuing a sales invoice with a quantity exceeding the actual inventory quantity is prevented until the requisition is approved, even if this quantity doesn’t exceed the total quantity of the product before requisition approval.

It will be clarified through the following examples in this guide.

 

To activate the “Control Inventory Validation Method” setting, click on “Inventory Settings” from the dropdown menu under “Inventory” in the main menu. Then click on the “General” tab and enable the “Show Both On-hand And Available Stock Of Products” setting.

Choose the validation method as “On Hand Stock“.

 

Here appears the product “Copper Earrings” with an on-hand stock of 10 pieces.

 

 

Here, we have created an invoice for one piece of the same product.

 

 

After creating the invoice, we find the requisition for the invoice in the “Under Delivery” status.

 

Here is the product page in the following format:

• On Hand Stock: 10, as it is, since the requisition has not been approved yet.
• Pending Stock: -1, resulting from the invoice pending requisition approval.
• Available Stock: 9, reflecting the actual quantity, as the piece sold in the invoice is considered sold, awaiting requisition approval.

 

When attempting to create an invoice with an on-hand stock of the product as “10,” it gets approved, as inventory validation based on the on-hand stock does not consider the pending stock of the product. This differs from the case when stock validation based on available stock is activated.

Here is the product page in the following format:

• On Hand Stock: 10, as it is, since the requisition for the two previous invoices has not been approved yet.
• Pending Stock: -11, resulting from the two invoices pending requisition approval.
• Available Stock: -1, reflecting the actual quantity, as the quantity of products dispensed in the invoices pending requisition approval has exceeded the actual quantity of products by one piece.

To activate the “Control Inventory Validation Method” setting, click on “Inventory Settings” from the dropdown menu under “Inventory” in the main menu. Then click on the “General” tab and enable the “Show Both On-hand And Available Stock Of Products” setting.

Choose the validation method as “Available Stock“.

 

 

Here appears the product “Silver Earrings” with a total inventory of 10 pieces.

 

 

Here, we have created an invoice for one piece of the same product.

 

After creating the invoice, we find the requisition for the invoice in the “Under Delivery” status.

 

Here is the product page in the following format:

• On Hand Stock: 10, as it is, since the requisition has not been approved yet.
• Pending Stock: 1, resulting from the invoice pending requisition approval.
• Available Stock: 9, reflecting the actual quantity, as the piece sold in the invoice is considered sold, awaiting requisition approval.

 

 

When attempting to create an invoice with an on-hand stock as “10”, the invoice is not approved and a message appears indicating that this quantity exceeds the actual quantity available for the product. This is because inventory validation is based on the actual quantity of the product, considering the reserved quantity, unlike when inventory validation based on available stock is activated.