ERPNext Inventory Management: A Practical Guide

ERPNext's Stock module covers most inventory needs of small and mid-sized businesses. Here is how to set it up well.

Items and item groups

Items are products, materials and services. Group them into item groups for reporting and defaults. Use item variants for products with attributes such as size and colour. Set the stock unit of measure and conversion factors for purchase and sales units.

Warehouses

Warehouses in ERPNext form a tree. Create one per physical location, and sub-warehouses for areas such as stores, work in progress, finished goods and rejected stock. Each warehouse is linked to a stock account.

Stock transactions

• Purchase receipt brings stock in from suppliers
• Delivery note sends stock to customers
• Stock entry covers transfers, material issue, material receipt and manufacturing
• Stock reconciliation sets quantities and values, used for opening stock and counts

Batches and serial numbers

Enable batch or serial tracking on items that need it. Batches can carry expiry dates. Serial numbers track each unit through sales, warranty and returns.

Valuation

Choose FIFO or moving average at company level, with item-level overrides where needed. With perpetual inventory, every stock transaction posts to the general ledger automatically.

Reorder levels

Set reorder level and reorder quantity per item and warehouse. With auto-reorder enabled, ERPNext raises material requests that purchasing turns into purchase orders. See reorder points and safety stock.

Reports

• Stock balance and stock ledger
• Stock ageing
• Projected quantity
• Batch-wise balance
• Item shortage

Common pitfalls

• Allowing negative stock, which hides problems
• Mixing units of measure without conversion factors
• Skipping opening stock reconciliation

See what is ERPNext, the ERPNext implementation guide or our ERPNext implementation service.