Issuing Inventory Transfers and Inventory Transfer Requests

You can create an inventory transfer to move your inventory between company warehouses (and bin locations at the same warehouse). This involves transferring items from one warehouse to another to ensure optimal stock levels and availability. For example, if one warehouse is running low on a particular item while another has excess stock, an inventory transfer can be initiated to balance the inventory levels. This process helps maintain efficient operations and prevents stockouts or overstock situations.

Inventory transfers can include optional fields for a business partner, a contact person, and a ship-to address. These fields are useful when transferring items to a consignment warehouse at a customer's site. Items stored in the customer's warehouse are sold from there. When items are withdrawn, you can create an A/R invoice, showing inventory removal from the consignment warehouse.

For better planning and coordination, you can use inventory transfer requests. Inventory transfer requests commit items to move from one warehouse to another with no effect on inventory movements or financials. You can then copy the inventory transfer request to an inventory transfer. This changes the request status to Closed. The stock will be transferred, and the financial posting will be made when the request is closed.

Imagine the Inventory transfer request as a sales order, and the inventory transfer as a sales delivery. The difference between them is that the inventory transfer process delivers items to another warehouse, whereas the sales order/delivery process delivers items to a customer.

When the inventory transfer request has the status Open:

• For the issuing warehouse, the requested quantity is regarded as Committed.

• For the receiving warehouse, the requested quantity is regarded as Ordered.

When the inventory transfer request has the status Closed:

• For the issuing warehouse, the requested quantity is released from the Committed quantity. If you copy this request fully into an inventory transfer, the quantity is subtracted from the In Stock quantity.
• For the receiving warehouse, the requested quantity is released from the Ordered quantity. If you copy this request fully into an inventory transfer, the quantity is added to the In Stock quantity.

When you add an inventory transfer from Warehouse 02 to Warehouse 01, the system posts a journal entry. The journal entry posts the value of the transferred goods on the debit side of the Stock Account of Warehouse 01 and on the credit side of the Inventory account of Warehouse 02.

In both inventory transfers and inventory transfer requests, you are prompted to fill in the serial/batch numbers and/or bin locations for the items being managed by them.