Stock Entry Purpose

Products are shifted, corrected, consumed, or repackaged among warehouses or subcontractors by the help of an ERPNext utility transaction known as a Stock Entry. Each stock entry type (also known as Purpose) has its own use case.

The existing stock entry purposes and their detailed explanations are as follows:

1. Material Issue

When merchandise ships out of a warehouse and is not received elsewhere, it is entered as a Material Issue. Stock decreases from the Source Warehouse when submitting.

Use Cases:

• Supplying low-cost consumables such as packing materials or office supplies; control of batched or serialised products where adjustments to stock are required.

An example of this would be when pens are ordered by office workers from the stationery warehouse. The stock of pens reduces.

2. Material Receipt

When products are added directly into a warehouse without going through a purchase transaction first, a Material Receipt posting is used. Stock in the Target Warehouse increases when submitted.

Use Cases:

• To record goods received without a purchase order (e.g., donations or free samples); * To post opening balances for serialised or batched goods.
  • Adjusting for inventory on hand discovered with a physical inventory audit.

Note: ERPNext requires a Item Valuation Rate to calculate stock valuation, and therefore it has to be set.

3. Materials Transfer

Where inventory is to be moved from one warehouse of a company to another, a Material Transfer is generated. Stock increases in the Target Warehouse and decreases in the Source Warehouse when submitted.

Use Cases:

• Moving stock from warehouses located in different branches or cities; * Shipments of finished goods from the Production Warehouse to the Finished Goods Warehouse.

4. Material Transfer for Manufacture

The Work-in-Progress (WIP) Warehouse is where raw materials are first moved from the Stores Warehouse during manufacturing. A Material Transfer for Manufacture entry is applied to capture this.

Use Cases:

• Triggers automatically on work order creation. The Bill of Materials (BOM) of the product being produced is where the materials are sourced from.

Materials used to make tea, such as tea leaves and sugar, are transferred from warehouses to work-in-progress warehouse.

5. Material Consumption for Manufacture

The quantity of raw materials consumed during production is recorded in a Material Consumption entry. This ensures accurate tracking of resource use relative to the Work Order.

Use Cases:

• Tracking variances between actual material use and planned BOM consumption. * Investigating manufacturing process effectiveness.

  Upon Submission:

• Raw material inventories decrease from the WIP Warehouse.

6. Manufacture

To record completed goods as per a Work Order completion, a Manufacture entry is recorded. On submitting, completed goods are put into the target warehouse and raw materials are utilized.

Procedure:

1. Raw materials are supplied from the WIP Warehouse.

2. Finished goods arrive at the Target Warehouse.

   Use Cases:

• On completion of a work order, recording production output.

The Warehouse of Finished Goods now contains 200 cups of tea that are packed after adding 5 kg of sugar and 2 kg of tea.

7. Repack

When products are bundled as kits or repacked in alternate forms, a Repack entry is made. The repacked products are stored in the warehouse once the source products have been depleted.

Use Cases:

• Breaking large amounts into small units (e.g., 50 kg bag of sugar → 1 kg packets).

• Creating kits or packs (gift hampers, for instance).

  Upon Submission:

  • Source item inventory decreases; repackaged item inventory increases.

8. Disassemble

A Disassemble entry records the breakup of a finished product into its component pieces. This leads to a reduction in the finished product and an increase in parts inventory.

Use Cases:

• Retrieval of raw materials from returned finished goods; * Breaking up defective goods to recover usable components.

  Upon Submission:

• Inventory of components increases while inventory of finished goods decreases.

9. Send to subcontractor

A Send to Subcontractor transaction is incurred every time raw materials are sent to a subcontractor for further processing. In ERPNext, products are shipped from the company's warehouse to a particular Subcontractor Warehouse.

Use Cases:

Rolls of cloth are sent to a subcontractor to stitch, and raw materials are shipped for special processing that is not performed in-house.

Procedure:

• Inventory is monitored in the Subcontractor Warehouse (linked to the subcontractor); raw materials decrease from the Company Warehouse.