Four numbers for one item

You’ll need: Inventory items, Inventory reports — if you cannot see these, the module may be switched off for your business or outside your permissions. An administrator can change either.

Ask how much of something you have and there are four honest answers. Confusing them is the most common source of inventory arguments.

The four

On-hand — physically here, now. What a stock count would find.

Reserved — on-hand, but already promised to a customer. Raised by sales orders.

Incoming — not here yet, but ordered from a supplier. Raised by purchase orders.

In transit — left one of your locations and not yet arrived at another. Only exists during an internal transfer.

   Warehouse A            in transit            Shop B
   on-hand   120   -->      30 units      -->   on-hand 8
   reserved   45
   available  75

   available = on-hand - reserved

Available is the one to act on

On-hand alone will get you into trouble: 120 units with 45 already promised means you can sell 75, not 120. Available is on-hand minus reserved, and it is the figure to check before promising anything.

Incoming is a planning number, not a promise. It says a supplier is expected to deliver, which is not the same as goods you can ship on Friday.

Why in-transit exists

A two-phase transfer takes stock out of the source when it is dispatched and puts it into the destination when it is received. Between those moments it belongs to neither.

Without in-transit, goods on a truck would either vanish from your figures or appear at their destination before arriving. With it, source plus in-transit plus destination always add up — and a consignment that never arrives shows as exactly what it is, sitting in transit, rather than quietly disappearing.

Negative available is a signal

Available can go negative — more promised than physically present. That is not a system error; it is the system reporting an over-commitment that already exists in the real world.

Treat it as an alarm. Something has been sold that is not there, and somebody is going to be disappointed unless a purchase order or a transfer lands first.

Try it

On staging.feeprime.com, take an item with stock, raise a sales order for part of it, and watch on-hand stay put while reserved rises and available falls. Then transfer some to another location and watch in-transit hold it in between.