Principles of Inventory Control

Controlling inventory can be challenging within any management system because it requires simultaneous control at many points in the inventory cycle in order to be effective. The following are the main points in the inventory cycle that affect inventory balances.


Purchasing an item does not affect inventory - but unless it is purchased, the items can not be easily received at inwards goods

Inwards Goods

Inwards goods transactions will increase inventory by the amount received.

Use in Manufacturing

If a raw material is used in manufacturing then it's stock level are reduced appropriately. This can be accounted for in the following ways

  • Committing Inventory within A Job

    Within the materials section of the jobcard, or in job summary we can assign items on the jobcard to the job and the inventory will reduce by the calculated amount. This is typically done before the job so that the available balance is known for future jobs

  • On the Shop Floor

    Staff can use the barcodes on the jobcards to scan the materials they actually use in-process

  • Post Job

    In the job summary section, the raw materials actually used can be assigned to the job - along with any variations from what may have been assigned at the beginning of the job

Sale of Finished Goods

Selling goods from stock will reduce inventory of those finished goods - these can be accounted for in the invoice grid or at dispatch

Manufacture of Goods for Sale

Manufacture of goods for sale will reduce the raw materials inventory (as above in manufacturing) but will result in an increase of finished goods inventory items. This is reconciled in the job summary section

Loss & Transfer of Stock

Goods can be damaged or lost outside a job. They can also be moved to other locations. The main methods for managing 'non-job' inventory transactions are the:

  • Stock count
  • Inventory transfer

For full details on how to complete Inventory Transfers and Updating Inventory Levels please see the Inventory Transfers/Adjustments article.

Related Articles:

Understanding Inventory Items

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