OnCloudERP Support

OnCloudERP - Negative Stock Setup

 

Negative stock functionality can be utilized in different business scenarios, for example

While shipping to a customer, there is not enough stock qty available to make shipment entry and instead of getting the "stock not available..." message when shipping, the system will allow you to deliver the material, and your inventory will show a negative quantity until the production or inward is performed. 

To overcome from this issue we are going with enabling “Allow Negative Stock” option for items.

As you know negative stock will have negative value, which will have direct impact to financials. Say you have a material of Qty 10 each total worth $ 10.00 in stock and since you enabled negative stock in system and if you try to issue stock of say 20 Each, system will show stock of negative 10 and value $-10.00.

After that if you try to do goods receipt of say 20 Qty each of value 20.00 material will have closing stock impact of 10 Qty each with value of $ 20.00

Negative Stock Setup

To make a specific item for allowing into negative transaction, in the items select the specific item and enable the allow negative stock to be true and if we are making an item for negative stock, we need to specify the standard cost, where this cost will take into consideration for inventory transaction of that item.

For delivering goods, you can ship goods in three different ways:

 

· Deliver goods with open reference.

· Deliver goods according to a sales order.

· Transferring goods from one warehouse to another.

· Transferring goods to work in progress location (for production consumption)

 

Home‣ Inventory ‣ Transactions ‣ Shipment.

 

· Customer : xyz

· Reference: Against SalesOrder / SalesInvoice / Open.

· Shipping lines :

· Item: [PC2] Basic+ PC (assembly on order).

· UoM : PCE,

· Shipping Location (warehouse): Default.

· Quantity  : 

In case, if the stock is not available in the particular location and if the particular item is mentioned to allow for negative stock, the item will allow for making shipment without having stock. And the closing inventory and closing value for the item will become negative. The same process will get applicable for consumption entry and for stock transfer.While doing negative stock transaction, there is no need to specify any sign (-) along with the quantity. The system automatically will recognize that the end-user is making negative transaction. For understanding this scenario more useful, herewith

Stock Table (before doing any transaction)

Item Code / Name	Location (Warehouse)	Quantity (closing Stock)	Value (Closing Value)	Standard Cost (Unit Rate)	Allow Negative
ITM001 – Vacuum Cleaner	Royal	0 Units	0.00	4700.00	Yes
ITM002 – Auto Vacuum Cleaner	Main Location	5 Units	85000.00	16500.00	No

 

Shipping Entry (Stock Movement)

Scenario:

 A sales order has been raised by requiring the items of Vacuum Cleaner (Qty -5) & Auto Vacuum (Qty -3) cleaner. So while doing shipping transaction, in the line items we need to specify as below

Item Code / Name	Location (Warehouse)	Shipping Qty	Stock Availability
ITM001 – Vacuum Cleaner	Royal	3	0
ITM002 – Auto Vacuum Cleaner	Main Location	3 Units	5

 

Stock Table (after doing shipping transaction)

Item Code / Name	Location (Warehouse)	Quantity (closing Stock)	Value (Closing Value)	Standard Cost (Unit Rate)	Allow Negative
ITM001 – Vacuum Cleaner	Royal	-3 Units	-14100.00	4700.00	Yes
ITM002 – Auto Vacuum Cleaner	Main Location	2Units	33000.00	16500.00	No

 

So, the current stock availability report will be generated as below;

Item Code / Name	Location (Warehouse)	Quantity (closing Stock)	Value (Closing Value)	Standard Cost (Unit Rate)
ITM001 – Vacuum Cleaner	Royal	-3 Units	-14100.00	4700
ITM002 – Auto Vacuum Cleaner	Main Location	2Units	33000.00	16500

 

Stock Movement - Inward Entry

 

For Stock inward goods, you can inward goods in three different ways:

· Making inward against purchase order.

· Making inward against purchase invoice.

· Making inward with open reference.

· Make adjustment entry using item journal.

· Transferring stock from one warehouse to another.

 

Home‣ Inventory ‣ Transactions ‣ Item Inward.

 

· Customer : xyz

· Reference: Against Purchase Order / Purchase Invoice / Open.

· Shipping lines :

· Item: Vacuum Cleaner

· UoM: PCE.

· Shipping Location (warehouse): Default.

· Quantity  : 3.

 

In case at the time of making the inward entry, if the stock is available in negative value in the particular location then that negative stock will get tally with receiving quantity and closing value will gets adjusted. In item master the items standard cost will not allowed to change once the item will have negative value. For understanding this scenario more better, go through the below said example

Stock Table (before doing any transaction)

Item Code / Name	Location (Warehouse)	Quantity (closing Stock)	Value (Closing Value)	Standard Cost (Unit Rate)	Allow Negative
ITM001 – Vacuum Cleaner	Royal	- 3 Units	-14100.00	4700.00	Yes
ITM002 – Auto Vacuum Cleaner	Main Location	5 Units	85000.00	16500.00	No

 

Shipping Entry (Stock Movement)

Scenario:

 A Purchase order has been raised by requiring the items of Vacuum Cleaner (Qty -5) & Auto Vacuum (Qty -3) cleaner. So while doing Item inward transaction, in the line items we need to specify as below

Item Code / Name	Location (Warehouse)	Shipping Qty
ITM001 – Vacuum Cleaner	Royal	5 Units
ITM002 – Auto Vacuum Cleaner	Main Location	3 Units

 

Stock Table (after doing Inward transaction)

Item Code / Name	Location (Warehouse)	Quantity (closing Stock)	Value (Closing Value)	Standard Cost (Unit Rate)	Allow Negative
ITM001 – Vacuum Cleaner	Royal	2 Units	9400.00	4700.00	Yes
ITM002 – Auto Vacuum Cleaner	Main Location	8 Units	133000.00	16500.00	No

 

So, the current stock availability report will be generated as below;

Item Code / Name	Location (Warehouse)	Quantity (closing Stock)	Value (Closing Value)	Standard Cost (Unit Rate)
ITM001 – Vacuum Cleaner	Royal	2 Units	9400.00	4700.00
ITM002 – Auto Vacuum Cleaner	Main Location	8Units	133000.00	16500.00