Inventory Setup

Inventory setup prepares stock records for controlled movement, valuation, reorder, POS, production, agriculture, and other stock-backed execution.

Open Inventory -> Setup.

Setup Goal

Inventory setup should make sure users can:

• identify stock-managed items clearly
• hold stock in valid warehouses or locations
• receive, issue, transfer, reserve, and count stock
• value stock consistently
• use stock in POS, production, agriculture, and billing workflows
• post inventory accounting correctly where enabled

Workspace Reference

Workspace	Open From	Main Create Button	Main Record
Item Categories	Inventory -> Setup -> Item Categories	New Stock Item Category	Inventory category used for policy, reporting, valuation, and accounting grouping.
Stock Items	Inventory -> Setup -> Stock Items	New Stock Item	Inventory-managed SKU used for stock balances and movements.
Warehouses	Inventory -> Setup -> Warehouses	Add Warehouse Location or location create action	Shared operational location used as a stock holding point.
Production Setup	Inventory -> Setup -> Production Setup	New BOM or New Routing	Reusable material recipe and production route.

Service guides may send Production or Agriculture users here when they need a produce item, feed item, medicine item, warehouse, BOM, or routing. The owner of those masters remains Inventory: create the shared stock category, stock item, warehouse, BOM, or routing here, then let the service workflow consume it.

Operational Items Versus Stock Items

The operational item is the shared business identity. It can represent a product, service, material, finished good, spare part, chargeable item, or non-stock item.

The stock item is the inventory-managed record. It adds stock behavior, movement controls, valuation behavior, warehouse balances, and tracking options.

Record Type	Use It For
Operational item	Shared identity reused across billing, POS, pricing, production, agriculture, events, and inventory.
Stock item	Items that need quantity balance, warehouse movement, stock take, reservation, or valuation.

Not every operational item should become a stock item. Services, subscriptions, digital offerings, and non-stock charges should remain outside inventory unless there is a real stock balance to manage.

Item Categories

Stock item categories group inventory records for operational, reporting, and accounting behavior.

Click New Stock Item Category.

Use categories to control or describe:

• stock family
• valuation grouping
• handling rules
• reporting group
• default accounting tags
• downstream use in POS, production, agriculture, procurement, or other stock-backed workflows

Categories should be broad enough for reporting but specific enough for policy. Avoid placing unrelated stock under one category if they need different valuation, handling, or accounting treatment.

Important category fields:

Field	Meaning
Category code or name	User-facing category reference.
Parent category	Optional grouping for category hierarchy.
Description	Explains when users should select the category.
Accounting or valuation settings	Defaults used where stock accounting depends on category policy.
Active status	Whether the category is available for new stock items.

Stock Items

Create a stock item only when the organisation needs inventory balance, movement, reservation, stock take, or valuation.

Click New Stock Item.

Important stock item details include:

Field Or Setting	Meaning
Linked operational item	Shared item identity that this stock record represents.
Item code and name	User-facing reference used in search, movement, and reporting.
Base UOM	Primary unit used for stock balance.
Category	Reporting, handling, and accounting grouping.
Tracking behavior	Lot, batch, serial, expiry, or none.
Valuation behavior	How cost and stock value should be interpreted.
Reorder settings	Minimum, maximum, reorder level, or replenishment thresholds where used.
Active status	Whether the item can be used for new inventory activity.

Tracking rules should be configured before stock is received. Changing tracking after stock exists can make balances difficult to explain.

Units Of Measure

Inventory depends on clear UOM setup.

Before receiving stock, confirm:

• base UOM is correct
• purchase UOM conversions are clear
• sale UOM conversions are clear where POS is used
• production UOM conversions are clear where BOMs are used
• fractional quantities are allowed only where operationally valid

Incorrect UOM setup causes price, quantity, production, and valuation errors.

Warehouse Locations

Warehouses are maintained through shared operational locations. Inventory uses locations that represent stock holding or stock movement points.

Open Inventory -> Setup -> Warehouses or the shared Administration -> General Setup -> Operational Locations workspace when maintaining warehouse locations.

Before using a warehouse, confirm:

• it is active
• it belongs to the correct business unit or operating area
• users understand whether it is a physical store, storage room, processing site, vehicle, quarantine area, damaged-goods area, or virtual holding area
• transfer routes or movement responsibilities are clear

Do not create duplicate warehouses for the same physical location unless finance and operations need separate stock responsibility.

Important warehouse fields:

Field	Meaning
Location name or code	User-facing warehouse or store reference.
Location type	Should identify the location as a warehouse or stock-holding point where applicable.
Business unit or owner	Operating area responsible for stock held there.
Parent location	Optional hierarchy such as branch, building, store, room, or zone.
Active status	Whether the location can be used for new stock activity.

Tracking: Batch, Lot, Serial, And Expiry

Use tracking when users need to know which exact stock was received, sold, consumed, returned, or expired.

Tracking Type	Use It When
Batch or lot	Stock is received and issued in identifiable production or supplier lots.
Serial	Individual units require unique tracking.
Expiry	Stock can expire or become unusable after a date.
None	Item can be controlled by quantity only.

Tracking improves control but adds operational work. Use it where it is genuinely needed.

Production Setup

Production setup defines reusable manufacturing or assembly structures.

Open Inventory -> Setup -> Production Setup.

Use:

• BOMs to define input components for an output item
• Routings to define operational steps, resources, labour, quality checks, or execution sequence

Production setup can support POS kits, apparel production, agriculture processing, food production, assembly, and general manufacturing. Agriculture may consume these shared BOMs or routings for processing flows, but it should not maintain a second service-owned production master.

Before using a BOM:

• confirm output item is correct
• confirm input items are active stock items
• confirm quantities and UOM are correct
• confirm waste, scrap, or yield assumptions
• confirm routing steps are operationally realistic
• confirm cost absorption expectations

Important production setup fields:

Field	Meaning
Output item	Stock item being produced.
Component item	Input material consumed by the BOM.
Component quantity and UOM	Expected material requirement.
Wastage, scrap, or yield assumption	Expected production loss or output assumption.
Operation	Production step in the routing.
Sequence	Order of production steps.
Resource or resource type	Capacity used by the operation where configured.
Default BOM or routing	Normal recipe or route used when several versions exist.

Accounting Readiness

Inventory can affect accounting when receipts, issues, adjustments, write-downs, landed costs, or production movements post value.

Before go-live, confirm:

• inventory asset accounts are mapped
• cost of goods or consumption accounts are mapped
• adjustment and write-down accounts are mapped
• landed cost treatment is clear
• production variance or absorption treatment is clear
• control-account tracking is available where required
• posting periods and approval rules are understood

Setup Checklist

• Shared operational item exists where needed.
• Stock category is correct.
• Stock item uses the right UOM and valuation behavior.
• Warehouse location is active and correctly scoped.
• Tracking requirements are configured before stock is received.
• Reorder settings are reviewed where used.
• BOM components and routing steps are reviewed before production orders use them.
• GL tags and posting rules are reviewed for stock movements and valuation changes.
• POS, production, agriculture, and billing users know which shared stock items and warehouses they should use.

Common Mistakes

Mistake	Better Practice
Creating duplicate item identities across POS, production, or agriculture.	Use shared operational items and create stock items only where stock is managed.
Treating Agriculture as the owner of produce-item or warehouse setup.	Keep those masters in Inventory and let Agriculture consume them as context.
Enabling serial or batch tracking after stock exists.	Decide tracking before first receipt.
Using warehouse locations without business ownership.	Assign locations clearly to operating areas.
Ignoring UOM conversion.	Confirm purchase, sale, stock, and production UOM rules.
Treating non-stock services as inventory.	Keep services as operational or billable items outside stock management.

Related Guides

• Inventory Operations
• Operational Items
• Operational Locations
• POS Setup