Documentation

Inventory Settings Guide

Configure inventory management preferences, alerts, and operational settings for your organization.

Watch: Inventory Settings Configuration (6 min)

Overview

Inventory Settings allow you to customize how the inventory module operates for your organization. These settings affect stock counting, reservations, alerts, and various operational behaviors.

Inventory settings dashboard
Configure all inventory settings from one location
Permissions

Only users with the "Manage Inventory Settings" permission can modify these settings. Contact your administrator if you need access.

Accessing Settings

  1. Navigate to Settings
    Go to Inventory > Settings from the navigation menu.
  2. Select Category
    Choose the settings category you want to configure.
  3. Modify Settings
    Update the values as needed.
  4. Save Changes
    Click Save to apply the new settings.

Stock Count Settings

Configure how stock counts (cycle counts) are performed in your organization.

Stock count configuration settings
Configure stock counting behavior
Setting Options Description
Count Mode Partial / Full / Both
  • Partial: Only partial (cycle) counts allowed
  • Full: Only full warehouse counts allowed
  • Both: Allow either type
Visibility Mode Blind / Guided / Configurable
  • Blind: Hide system quantities from counters
  • Guided: Show system quantities to counters
  • Configurable: Choose per count
Auto-Approve Threshold 0% - 100% Counts with total variance percentage below this threshold are automatically approved. Set to 0% to require manual approval for all counts.
Best Practice

Use "Blind" visibility mode for more accurate counts. While slower, it prevents confirmation bias where counters assume the system is correct.

Stock Reservation Settings

Configure how stock reservations (holds) behave in your system.

Reservation configuration settings
Configure reservation behavior and expiry
Setting Default Description
Reservation Expiry Hours 24 hours How long a reservation remains active before auto-expiring. Set to 0 to disable auto-expiry.
Allow Over-Reservation No Whether to allow reserving more than available quantity. Enable for pre-orders or backorder scenarios.
Auto-Release on Order Cancel Yes Automatically release reservations when linked orders are cancelled.
Important

Very long expiry times can lead to stock being held unnecessarily. Review expired reservations regularly.

Low Stock Alert Settings

Configure alerts for products that fall below their reorder point.

Low stock alert configuration
Configure low stock alerts and notifications
Setting Options Description
Enable Low Stock Alerts Yes / No Turn low stock email alerts on or off.
Alert Frequency Immediate / Daily Digest
  • Immediate: Send alert as soon as stock drops
  • Daily Digest: Combine all low stock items into one daily email
Alert Recipients Email addresses Comma-separated list of email addresses to receive alerts.
Product Configuration

Remember to set the Reorder Point on each product for low stock alerts to work. Products without a reorder point won't trigger alerts.

Expiry Alert Settings

Configure alerts for products approaching their expiration date (batch-tracked items only).

Setting Default Description
Enable Expiry Alerts Yes Turn expiry date alerts on or off.
Days Before Expiry 30 days How many days before expiry to send the alert.
Alert Recipients Email addresses Comma-separated list of email addresses to receive expiry alerts.
Multiple Thresholds

For perishable goods, consider setting multiple alert thresholds (e.g., 30 days, 14 days, 7 days) using alert rules.

Purchase Settings

Configure purchase-related behaviors.

Setting Default Description
Require PO Approval Yes Require manager approval for all purchase orders.
PO Approval Threshold $0 Amount above which PO approval is required. Set to $0 to require approval for all.
Direct Purchase Limit $500 Maximum amount for direct purchases without approval.
Allow Over-Receive Yes (10%) Allow receiving more than ordered quantity, up to the specified percentage.

General Settings

General inventory management settings.

General inventory settings
Configure general inventory behavior
Setting Default Description
Default Warehouse (None) Pre-select this warehouse in forms. Useful for single-warehouse operations.
Costing Method Weighted Average Method used to calculate inventory cost. See detailed explanation below.
Negative Stock Warning
  • Allow: Allow stock to go negative
  • Warning: Warn but allow negative stock
  • Prevent: Block transactions causing negative stock
Auto-Generate SKU Yes Automatically generate SKU codes for new products.

Costing Methods Explained

The costing method determines how inventory costs are calculated when stock is sold or consumed. Choosing the right method affects your profit margins, tax calculations, and financial reporting.

Inventory costing methods comparison
Choose the costing method that fits your business needs
Method How It Works Best For
FIFO (First-In, First-Out) Oldest inventory costs are used first when calculating cost of goods sold. Perishable goods, businesses wanting to match physical flow of goods
LIFO (Last-In, First-Out) Newest inventory costs are used first. Remaining inventory valued at older costs. Businesses in inflationary environments (note: not allowed under IFRS)
Weighted Average Cost is calculated as the average of all inventory on hand after each purchase. Commodities, items with stable prices, simplicity
Standard Cost Fixed predetermined cost per unit. Variances tracked separately. Manufacturing, budgeting, cost control analysis

Costing Example

Consider these purchases of the same product:

Purchase Quantity Unit Cost Total
Jan 1 100 units $10.00 $1,000
Jan 15 100 units $12.00 $1,200
Jan 25 100 units $15.00 $1,500

If you sell 150 units, the cost of goods sold would be:

Method Calculation COGS
FIFO (100 x $10) + (50 x $12) $1,600
LIFO (100 x $15) + (50 x $12) $2,100
Weighted Avg 150 x $12.33 (avg) $1,850
Standard ($11) 150 x $11.00 $1,650
Important Considerations
  • LIFO is not permitted under IFRS (International Financial Reporting Standards)
  • Changing costing methods mid-year can affect financial reporting
  • Consult with your accountant before selecting or changing the costing method
Recommendation

Weighted Average is recommended for most businesses due to its simplicity and balanced approach. Use FIFO if you deal with perishable goods or need to match physical inventory flow.

Number Series Settings

Configure automatic numbering for inventory documents.

Number series configuration
Configure document numbering formats
Document Type Default Format Example
Purchase Order PO-{YYYYMMDD}-{XXXX} PO-20241210-0001
Goods Receipt GRN-{YYYYMMDD}-{XXXX} GRN-20241210-0001
Stock Count SC-{YYYYMMDD}-{XXXX} SC-20241210-0001
Reservation RES-{YYYYMMDD}-{XXXX} RES-20241210-0001
Supplier Return RMA-{YYYYMMDD}-{XXXX} RMA-20241210-0001
Direct Purchase DP-{YYYYMMDD}-{XXXX} DP-20241210-0001
Customization

Number formats can be customized with your preferred prefix, date format, and sequence length. Contact support for custom numbering schemes.

Troubleshooting

Settings Not Saving

  • Verify you have "Manage Inventory Settings" permission
  • Check for validation errors on the form
  • Ensure required fields are completed

Alerts Not Sending

  • Verify alert settings are enabled
  • Check that recipient email addresses are valid
  • Confirm email service is configured correctly
  • Review the alert history for error messages

Related Topics

Stock Counts

Learn how stock count settings affect cycle counting.

Reservations

Understand how reservation settings work.

Reports

View alert history and configuration reports.