¶ Inventory Module
¶ Overview
The Inventory (Stock) module in Sherkety ERP is your complete warehouse management system. From receiving goods to shipping orders, from tracking stock levels to managing multiple warehouses, this module gives you real-time visibility and control over your inventory operations.
Business Value:
- Eliminate stockouts and overstocking with real-time inventory tracking
- Reduce warehouse operational costs by 25% with optimized workflows
- Achieve 99%+ inventory accuracy with systematic counting procedures
- Track product movements across multiple locations and warehouses
- Automate inventory valuation and cost calculations
- Integrate seamlessly with Sales, Purchase, and Accounting modules
¶ Getting Started
¶ Prerequisites
Before using the Inventory module effectively, ensure you have:
- ✅ Configured warehouse and storage locations
- ✅ Set up products with proper product types (Storable Product)
- ✅ Defined inventory routes and operation types
- ✅ Configured units of measure for your products
- ✅ Set up stock valuation methods (FIFO, AVCO, or Standard)
¶ Initial Configuration
¶ 1. Configure Inventory Settings
Navigate to Inventory → Configuration → Settings
Essential Settings:
¶ Operations Section
- ✅ Multi-Step Routes - Enable advanced warehouse workflows (Pick → Pack → Ship)
- ✅ Delivery Packages - Track shipments in packages
- ✅ Batch & Serial Numbers - Track individual items or batches
- ✅ Consignment - Manage stock owned by vendors at your location
¶ Warehouse Section
- ✅ Storage Locations - Organize warehouse into zones/bins
- ✅ Multi-Warehouses - Manage multiple warehouse facilities
- ✅ Routes - Configure advanced inventory flows
¶ Traceability Section
- ✅ Lots & Serial Numbers - Full product traceability
- ✅ Expiration Dates - Track shelf life for perishable items
- ✅ Product Variants - Manage products with different attributes
¶ Valuation Section
- ✅ Inventory Valuation - Automated accounting integration
- ✅ Costing Method - FIFO, AVCO, or Standard Price
¶ 2. Set Up Warehouses
Path: Inventory → Configuration → Warehouses
A warehouse represents a physical location where you store products.
Steps:
- Click Create
- Enter warehouse details:
- Warehouse Name: e.g., "Main Warehouse", "Retail Store NYC"
- Short Name: Code for internal reference (e.g., "WH01")
- Address: Physical location
- Configure operation types (Receipts, Delivery, Internal Transfers)
- Define routes (default or custom)
- Save
Default Warehouses:
- Most businesses start with one warehouse
- Add more as you expand to new locations
- Each warehouse has its own stock levels
¶ 3. Configure Storage Locations
Path: Inventory → Configuration → Locations
Locations organize your warehouse into specific areas.
Location Hierarchy Example:
Main Warehouse
├── Receiving Area (WH/IN)
├── Stock Area (WH/Stock)
│ ├── Shelf A (WH/Stock/Shelf-A)
│ ├── Shelf B (WH/Stock/Shelf-B)
│ └── Shelf C (WH/Stock/Shelf-C)
├── Packing Area (WH/Packing)
└── Shipping Area (WH/OUT)
Creating Locations:
- Click Create
- Enter location name (e.g., "Shelf A")
- Select parent location (e.g., "Stock Area")
- Set location type:
- Internal Location: Physical storage
- Customer Location: Virtual (shipped to customer)
- Vendor Location: Virtual (received from vendor)
- View: Organizational grouping
- Save
Best Practice: Start simple with basic locations, add detail as needed.
¶ Daily Operations
¶ Workflow 1: Receive Products from Supplier
Business Scenario: You ordered 100 office chairs from your supplier. The shipment arrives at your warehouse.
¶ Step 1: View Incoming Shipments
- Navigate to Inventory → Operations → Receipts
- Find receipt order (auto-created from purchase order)
Receipt shows:
- Vendor name
- Expected products and quantities
- Reference to purchase order
- Status: Waiting, Ready, Done
¶ Step 2: Process Receipt
- Open the receipt order
- Review products and quantities
- Detailed Operations tab shows:
- Product
- Quantity to receive
- From: Vendor location (virtual)
- To: Your warehouse location
¶ Step 3: Validate Receipt
Option A: Receive Full Quantity
- Verify products received match order
- Click Validate
- Status changes to "Done"
- Stock levels update automatically
Option B: Receive Partial Quantity
- Click on product line
- Change Done quantity (e.g., received 80 instead of 100)
- Click Validate
- System asks: "Create backorder for remaining 20?"
- Click Create Backorder (for remaining items) or No Backorder
Result:
- Products added to your inventory
- Stock levels updated in real-time
- Accounting entries created (if inventory valuation enabled)
- Purchase order updated to "Received" status
View in Kanban:
¶ Workflow 2: Deliver Products to Customer
Business Scenario: Customer ordered 50 office chairs. Sales order is confirmed. Time to ship.
¶ Step 1: View Outgoing Deliveries
- Navigate to Inventory → Operations → Delivery Orders
- Find delivery order (auto-created from sales order)
Delivery order shows:
- Customer name
- Products to ship
- Sales order reference
- Scheduled date
- Status: Waiting, Ready, Done
¶ Step 2: Pick Products
- Open delivery order
- Review products and quantities
- Detailed Operations tab shows:
- Product
- Quantity to pick
- From: Your warehouse location
- To: Customer location (virtual)
¶ Step 3: Check Availability
If products in stock:
- Status shows "Ready"
- Quantity available displayed
- Proceed to validation
If insufficient stock:
- Status shows "Waiting Availability"
- System highlights shortage
- Options:
- Wait for incoming shipment
- Partial delivery
- Cancel and inform customer
¶ Step 4: Validate Delivery
- Verify products picked and packed
- Click Validate
- Status changes to "Done"
Result:
- Stock levels decrease
- Sales order updates to "Done"
- Customer can be invoiced (if invoice policy = "Delivered quantities")
- Accounting entries created
View in Kanban:
¶ Workflow 3: Internal Transfers Between Locations
Business Scenario: Move 20 office chairs from "Shelf A" to "Packing Area" for an upcoming large order.
¶ Step 1: Create Internal Transfer
- Navigate to Inventory → Operations → Internal Transfers
- Click Create
¶ Step 2: Configure Transfer
- From: Select source location (e.g., "WH/Stock/Shelf-A")
- To: Select destination location (e.g., "WH/Packing")
- Add products:
- Click Add a line
- Select product (Office Chair)
- Set quantity (20)
¶ Step 3: Execute Transfer
- Click Check Availability (ensures stock exists at source)
- Status changes to "Ready"
- Physically move products
- Click Validate
Result:
- Stock moved from Shelf A to Packing Area
- Total warehouse stock unchanged
- Location-specific stock updated
- Movement history recorded
Use Cases:
- Preparing orders in packing area
- Reorganizing warehouse
- Moving damaged goods to quality control area
- Seasonal inventory rearrangement
¶ Workflow 4: Inventory Adjustments and Stock Counts
Business Scenario: Monthly physical inventory count reveals discrepancies. Need to adjust system to match reality.
¶ Step 1: Initiate Inventory Adjustment
- Navigate to Inventory → Operations → Inventory Adjustments
- Click Create
¶ Step 2: Add Products to Count
Option A: Select Specific Products
- Click Add a line
- Select products to count
- Enter location
- System shows current quantity in system
Option B: Start from Product View
- Navigate to Inventory → Products → Products
- Select product
- Click Update Quantity
¶ Step 3: Count and Adjust
- Counted Quantity column: Enter actual physical count
- Difference column: System calculates variance
- Accounting Date: Set date for valuation
- Add note explaining adjustment (required for audit trail)
Example:
- System Quantity: 100
- Counted Quantity: 95
- Difference: -5 (shortage)
- Reason: "Monthly count - 5 units damaged"
¶ Step 4: Validate Adjustment
- Review all adjustments
- Click Validate
Result:
- System quantity updated to match counted quantity
- Stock valuation adjusted
- Journal entry created (if inventory valuation enabled)
- Adjustment history recorded for auditing
Best Practices:
- Perform regular cycle counts (weekly or monthly)
- Always document reasons for adjustments
- Investigate large discrepancies immediately
- Assign responsibility for specific product categories
¶ Workflow 5: Track Product Stock Levels
Business Scenario: Need to check if you have enough stock to fulfill orders and when to reorder.
¶ View Current Stock Levels
Method 1: Products Dashboard
- Navigate to Inventory → Products → Products
- See Quantity On Hand column for each product
- Green: In stock
- Red: Out of stock or below reordering point
Method 2: Product Detail View
- Open a product
- View smart buttons at top:
- On Hand: Current available stock
- Forecasted: Available + incoming - outgoing
- Routes: How product flows through warehouse
Method 3: Stock by Location
- Navigate to Inventory → Reporting → Stock
- View stock quantities by:
- Product
- Location
- Warehouse
- Lot/Serial number
Key Metrics:
- On Hand: Physical stock available right now
- Reserved: Allocated to sales orders but not yet delivered
- Available: On Hand - Reserved
- Incoming: Purchase orders not yet received
- Forecasted: Available + Incoming - Outgoing
¶ Advanced Features
¶ Batch and Serial Number Tracking
Business Scenario: Track individual laptops by serial number for warranty purposes, or pharmaceutical batches for regulatory compliance.
¶ Setup Serial Number Tracking
- Open product
- Inventory tab
- Enable Tracking:
- By Unique Serial Number - Each unit has unique ID
- By Lots - Groups of units share batch ID
¶ Use Serial Numbers
On Receipt:
- Receive products
- System prompts: "Enter serial numbers"
- Scan or type serial number for each unit
- Click Confirm
On Delivery:
- Pick items for delivery
- System prompts: "Select serial numbers"
- Choose which specific units to ship
- Full traceability maintained
Benefits:
- Track warranty by serial number
- Recall specific batches if needed
- Comply with regulatory requirements (food, pharma, medical devices)
- Prevent counterfeit products
¶ Multi-Warehouse Management
Business Scenario: You operate warehouses in New York, Los Angeles, and Chicago. Need to manage stock across all locations.
¶ Configure Multiple Warehouses
- Inventory → Configuration → Warehouses
- Create warehouse for each location:
- WH-NY: New York
- WH-LA: Los Angeles
- WH-CHI: Chicago
¶ Transfer Between Warehouses
Create Inter-Warehouse Transfer:
- Inventory → Operations → Internal Transfers
- From: WH-NY/Stock
- To: WH-LA/Stock
- Add products
- Validate transfer
Result: Stock moves from NY to LA inventory.
¶ View Stock by Warehouse
- Inventory → Reporting → Stock
- Group By → Warehouse
- See stock levels at each location
Use Cases:
- Balance stock across regions
- Fulfill orders from nearest warehouse
- Transfer slow-moving items to high-demand locations
- Consolidate inventory before closeouts
¶ Dropshipping (Ship Direct from Supplier)
Business Scenario: Customer orders a product you don't stock. Supplier ships directly to customer.
¶ Configure Dropshipping Route
- Open product
- Inventory tab
- Routes: Enable Dropship
¶ Process Dropship Order
- Customer places sales order
- System creates purchase order to supplier
- Confirm purchase order
- Supplier ships directly to customer
- No stock movement in your warehouse
- Both sales order and purchase order marked "Done"
Benefits:
- No inventory carrying costs
- Offer wider product range
- Reduce warehouse space needs
- Faster delivery in some cases
Drawback: Less quality control over shipping
¶ Automated Reordering Rules
Business Scenario: Automatically generate purchase orders when stock falls below threshold.
¶ Create Reordering Rule
- Open product
- Click Reordering Rules smart button
- Click Create
- Configure:
- Min Quantity: 20 (trigger reorder)
- Max Quantity: 100 (order up to this level)
- Quantity Multiple: 10 (order in multiples)
- Vendor: Preferred supplier
- Route: Buy
Example:
- Current stock: 25 units
- Sales order for 10 units created
- Forecasted: 15 units (below min of 20)
- System automatically creates purchase order for 85 units (to reach max of 100)
Run Reordering:
- Automatic: Runs nightly (scheduler)
- Manual: Inventory → Operations → Run Scheduler
Result: Never run out of stock, never overstock.
¶ Inventory Valuation Methods
Business Scenario: Track cost of goods sold and inventory value for accounting purposes.
¶ Configure Valuation Method
- Inventory → Configuration → Product Categories
- Select category (e.g., "All")
- Inventory Valuation: Automated
- Costing Method:
- FIFO (First In, First Out): Use oldest cost first
- AVCO (Average Cost): Weighted average
- Standard Price: Fixed cost
¶ View Inventory Valuation
- Inventory → Reporting → Inventory Valuation
- See total inventory value
- Breakdown by product
- Journal entries for stock moves
Example: FIFO Method
- Buy 10 units @ $50 each = $500
- Buy 10 units @ $60 each = $600
- Sell 5 units → Cost = $50 each (FIFO)
- Remaining value: 5 @ $50 + 10 @ $60 = $850
Integration with Accounting:
- Receipt: Debit Inventory Asset, Credit Accounts Payable
- Delivery: Debit COGS, Credit Inventory Asset
- Fully automated
¶ Integration Scenarios
¶ Inventory ↔ Sales Integration
Workflow: Sales order automatically creates delivery order
How It Works:
- Sales order created with storable products
- Confirm sales order
- Delivery order created automatically in Inventory
- Smart button appears: "Delivery: 1"
- Warehouse team:
- Opens delivery order
- Picks products
- Validates delivery
- Stock decreased automatically
- Sales order marked "Done"
Configuration Required:
- Products must have Product Type = "Storable Product"
- Inventory module installed
- Warehouse routes configured
¶ Inventory ↔ Purchase Integration
Workflow: Purchase order creates receipt order
How It Works:
- Purchase order created
- Confirm purchase order
- Receipt order created automatically
- Smart button: "Receipt: 1"
- Warehouse team:
- Receives shipment
- Validates receipt
- Stock increased automatically
- Purchase order ready for invoicing
Configuration Required:
- Products configured for purchasing
- Vendor selected on purchase order
See: Purchase Module Integration
¶ Inventory ↔ Accounting Integration
Workflow: Automated inventory valuation and journal entries
How It Works:
On Receipt (Purchase):
- Journal Entry:
- Debit: Inventory Asset (e.g., $1,000)
- Credit: Stock Interim (Received) (e.g., $1,000)
- On Vendor Bill:
- Debit: Stock Interim
- Credit: Accounts Payable
On Delivery (Sale):
- Journal Entry:
- Debit: Cost of Goods Sold (e.g., $600)
- Credit: Inventory Asset (e.g., $600)
Configuration Required:
- Inventory → Settings: Enable "Inventory Valuation"
- Product Categories: Set costing method
- Chart of Accounts: Configure stock accounts
See: Accounting Module Integration
¶ Reporting & Analysis
¶ Standard Reports
¶ Inventory Valuation Report
Path: Inventory → Reporting → Inventory Valuation
Shows:
- Total inventory value (balance sheet)
- Value by product
- Value by location
- Historical valuation changes
Use Cases:
- Month-end closing
- Financial statements
- Audit preparation
- Insurance calculations
¶ Stock Moves Report
Path: Inventory → Reporting → Stock Moves
Shows:
- All stock movements
- Date, product, quantity, from/to locations
- Reference (sales order, purchase order, etc.)
Filters:
- Date range
- Product
- Location
- Operation type (receipt, delivery, internal)
Use Cases:
- Audit trail
- Investigate discrepancies
- Track product movement history
- Analyze warehouse activity
¶ Inventory Analysis
Path: Inventory → Reporting → Inventory
Graph View:
- Stock level trends over time
- Forecasted vs actual inventory
- Turnover analysis
Pivot View:
Multi-dimensional analysis:
- Rows: Product, Product Category
- Columns: Warehouse, Location
- Measures: Quantity, Value, Turnover
¶ Custom Reporting
¶ Create Stock Turnover Report
Scenario: Identify slow-moving inventory to clear out.
- Navigate to Inventory → Reporting → Stock Moves
- Filter: Last 90 days
- Group By: Product
- Sort by quantity (ascending)
- Products with low movement = slow movers
Actions:
- Discount slow-moving items
- Transfer to locations with higher demand
- Adjust reordering rules
- Discontinue products with no movement
¶ Export Stock Levels to Excel
- Navigate to Inventory → Products → Products
- Select products (or Select All)
- Click Action → Export
- Select fields: Product, Qty On Hand, Qty Available, Forecasted
- Click Export
- Opens in Excel for analysis
¶ Best Practices
¶ ✅ Warehouse Organization
Use Logical Location Structure
- Organize by product category (Electronics, Furniture, etc.)
- Or by velocity (Fast-moving near shipping, slow-moving in back)
- Clear location names (Shelf-A-1, not "S1")
- Benefit: Faster picking, fewer errors
Implement ABC Analysis
- A items: High value, 20% of items, 80% of value → Prime locations
- B items: Medium value → Standard locations
- C items: Low value → Back locations
- Benefit: Optimize picking efficiency
Barcode Locations
- Print location barcodes
- Scan on pick/put-away
- Benefit: Accuracy, speed, error reduction
¶ ✅ Inventory Accuracy
Regular Cycle Counts
- Count 20% of inventory weekly (complete count monthly)
- Focus on high-value items
- Schedule counts during low-activity periods
- Benefit: 99%+ inventory accuracy
Investigate All Discrepancies
- Any variance > 2% requires investigation
- Document reasons for adjustments
- Address root causes (theft, damage, data entry errors)
- Benefit: Continuous improvement
First In, First Out (FIFO)
- Oldest stock shipped first
- Critical for perishables
- Mark receipt dates on products
- Benefit: Reduce waste, ensure freshness
¶ ✅ Operational Efficiency
Batch Processing
- Process multiple receipts together
- Validate multiple deliveries at once
- Schedule transfers during off-peak hours
- Benefit: Reduce processing time
Reserve Stock for Confirmed Orders
- Stock automatically reserved on sales order confirmation
- Prevents double-booking
- Clear visibility of available vs reserved
- Benefit: Accurate promise dates to customers
Use Mobile Devices
- Warehouse staff use tablets/handhelds
- Scan barcodes for receipts, picks, transfers
- Real-time updates to system
- Benefit: Faster operations, fewer errors
¶ ✅ Stock Optimization
Set Safety Stock Levels
- Minimum quantity to avoid stockouts
- Based on lead time and demand variability
- Configure in reordering rules
- Benefit: Balance stock availability and carrying costs
Monitor Stock Turnover Ratio
- Formula: (Cost of Goods Sold) / (Average Inventory Value)
- Target: 4-8 times per year (varies by industry)
- Monthly review of slow movers
- Benefit: Reduce holding costs, improve cash flow
Seasonal Planning
- Increase stock before peak seasons
- Reduce before slow periods
- Adjust reordering rules seasonally
- Benefit: Meet demand without excess inventory
¶ Troubleshooting
¶ Issue: Negative Stock Shown
Symptoms: Product shows negative quantity on hand
Possible Causes:
-
Delivery processed before receipt
- Solution: Validate receipts first, then deliveries
- Or enable "Allow Negative Stock" if acceptable
-
Inventory adjustment error
- Solution: Review inventory adjustment history
- Correct with new adjustment
-
Concurrent operations
- Solution: System should prevent this
- Contact system administrator
¶ Issue: Delivery Order Stuck in "Waiting Availability"
Symptoms: Cannot validate delivery, status shows waiting
Possible Causes:
-
Insufficient stock
- Solution: Check stock levels
- Options:
- Receive incoming shipment
- Partial delivery
- Cancel order
-
Stock reserved elsewhere
- Solution: Check other pending deliveries
- Unreserve or prioritize orders
-
Stock in wrong location
- Solution: Internal transfer to correct location
- Or change delivery source location
¶ Issue: Product Not Appearing in Stock Reports
Symptoms: Product exists but doesn't show in inventory reports
Possible Causes:
-
Product type not "Storable Product"
- Solution:
- Open product
- General Information tab
- Product Type: Change to "Storable Product"
- Solution:
-
No stock movements yet
- Solution: Create inventory adjustment to set initial stock
-
Filter excluding product
- Solution: Check report filters
- Remove or adjust filters
¶ Issue: Reordering Rules Not Triggering
Symptoms: Stock below minimum, but no purchase order created
Possible Causes:
-
Scheduler not running
- Solution: Inventory → Operations → Run Scheduler manually
- Or check automated scheduler settings
-
Route not configured
- Solution: Verify product has "Buy" route enabled
-
No vendor defined
- Solution: Add vendor to product or reordering rule
-
Reordering rule inactive
- Solution: Check rule is not archived
- Verify min/max quantities set correctly
¶ Frequently Asked Questions
Q: What's the difference between "On Hand" and "Available" quantity?
A:
- On Hand: Physical stock in warehouse right now
- Reserved: Allocated to sales orders (confirmed but not yet delivered)
- Available: On Hand - Reserved (free to allocate to new orders)
Example:
- On Hand: 100 units
- Reserved: 30 units (3 pending deliveries)
- Available: 70 units (can promise to new customers)
Q: Can I track inventory in multiple units of measure?
A: Yes. Configure in Inventory → Configuration → Settings → Enable "Units of Measure"
Example:
- Buy in pallets (1 pallet = 100 units)
- Store in cases (1 case = 10 units)
- Sell in individual units
System handles conversions automatically.
Q: How do I handle damaged or defective products?
A:
- Create Internal Transfer
- From: Current location
- To: "Damaged Goods" or "Quality Control" location
- Validate transfer
Later:
- If repairable: Transfer back to stock
- If scrap: Inventory adjustment to zero with reason "Damaged"
Q: Can I reserve stock for a quotation before it's confirmed?
A: No, stock is only reserved when sales order is confirmed (not at quotation stage).
Workaround:
- Create Internal Transfer to "Reserved" location
- When order confirmed, transfer back and process normally
- Manual process, use sparingly
Q: How do I handle returns from customers?
A:
- Navigate to sales order
- Click Return button
- Select products and quantities to return
- System creates Reverse Delivery Order
- Validate when products received
- Stock increased automatically
For refund: Create credit note in Accounting/Sales module.
Q: What happens if I validate a receipt/delivery by mistake?
A: Validated operations cannot be edited. You must create a reverse operation:
If wrong receipt:
- Create Internal Transfer or Delivery to remove stock
- Create correct receipt
If wrong delivery:
- Process Return (reverse delivery)
- Create correct delivery
Best Practice: Always double-check before clicking Validate.
¶ Related Modules
- Sales - Deliver products to customers
- Purchase - Receive products from suppliers
- Accounting - Inventory valuation and journal entries
- Manufacturing - Consume raw materials, produce finished goods
- Barcode - Scan barcodes for operations (if installed)
¶ Keyboard Shortcuts
Alt + C- Create new recordAlt + E- Edit current recordAlt + S- SaveEsc- Discard changes/- Global searchCtrl + K- Command palette
¶ Video Tutorials
(Coming soon)
- Inventory Quick Start (5 min)
- Receiving and Delivering Products (8 min)
- Multi-Warehouse Management (10 min)
- Inventory Adjustments and Cycle Counting (7 min)
- Batch and Serial Number Tracking (6 min)
¶ Glossary
Storable Product - Physical product tracked in inventory. Requires warehouse location.
Consumable - Product not tracked in stock (e.g., office supplies, cleaning materials). No inventory management needed.
Service - Non-physical product (consulting, labor). No inventory.
Operation Type - Category of stock movement: Receipt, Delivery, Internal Transfer, Manufacturing.
Location - Physical or virtual place where stock is stored. Examples: Shelf A, Customer Location, Vendor Location.
Route - Path products follow through warehouse. Example: Receive → Quality Control → Stock → Packing → Shipping.
Picking - Selecting products from storage locations to fulfill an order.
Backorder - Partial fulfillment - remaining quantity to be shipped later.
Lot - Group of products produced/received together. Shares common batch number.
Serial Number - Unique identifier for individual product unit. One-to-one tracking.
Stock Valuation - Monetary value of inventory. Used for balance sheet and COGS calculation.
FIFO - First In, First Out. Oldest inventory used/shipped first.
AVCO - Average Cost. Inventory valued at weighted average of all purchases.
Forecasted Quantity - Predicted future stock level: Current + Incoming - Outgoing.
Reserved Quantity - Stock allocated to confirmed sales orders, not yet delivered.