Closing Stock Balance

Note: Closing Stock Balance is also referred to as Stock Closing Entry as of ERPNext versions 16 and higher.

Understanding the Stock Balance Report

An essential tool for keeping an eye on stock levels and making wise choices about stock movement and valuation is the stock balance report. There are four main columns in it:

Opening Stock
In Stock (Amount Received)
Out Stock (quantity leaving)
Stock Balance

The formula for calculating balance stock is:

Opening Stock + In Stock - Out Stock

Challenge with Opening Stock Calculation

Calculating Opening Stock is one of the performance snags in this report's execution. All records from the Stock Ledger Entry (SLE) table prior to the selected From Date are read in order to calculate this.

However, the query can be very slow and resource-intensive if the SLE table is large (as is common in high-transaction systems) and the report is run without filters on the item code or warehouse.

Solution: Stock Closing Entry (Closing Stock Balance)

In order to get around this, ERPNext offers the Stock Closing Entry feature, which calculates and saves the closing stock values in advance for easier access when creating reports.

How to Use the Stock Closing Entry Feature

Create Closing Stock Entry:

Create a Stock Closing Entry for the year's end after closing the fiscal year (for example, FY 2022–2023) and finishing audits.

System Prepares Data:

ERPNext computes the entry and maintains Opening Stock values internally after submission, greatly reducing the time it takes for reports to load.

Faster Stock Balance Report:

Instead of recalculating from the whole Stock Ledger, the system uses the Opening Stock straight from the Stock Closing Entry when users run the Stock Balance Report.

Repeat Annually:

To have accurate and up-to-date Opening Stock for later periods, a new Stock Closing Entry must be made at the conclusion of each fiscal year.

Benefits of Using Stock Closing Entry

Significantly improves report generation performance, especially in systems with large volumes of stock transactions.
Ensures that opening stock amounts for financial analysis are accurate and consistent.
Minimises processing time and server usage when reporting.

Closing Stock Balance