6. Inventory Module

The Inventory Module provides full stock management in NkapBooks — tracking every unit of goods across warehouse locations, from receiving goods through purchase receipts to shipping them to customers. It is accessible from the Inventory section in the sidebar and contains the following sub-modules:

6.1 Stock Movement

Stock Movements are versatile inventory transactions that allow you to move stock between locations, issue materials out, receive materials in, or record manufacturing operations — all without a linked sales or purchase invoice.

Schema Overview

Stock Movement Item Fields

Movement Types

Document Lifecycle

┌─────────┐      ┌───────────┐
│  Draft   │─────▶│ Submitted │
│          │      │           │
└─────────┘      └─────┬─────┘
                       │
                       ▼
                 ┌───────────┐
                 │ Cancelled │
                 └───────────┘

Key Features

• No Accounting Entries — Stock Movements are pure inventory operations and do not create accounting ledger entries (isTransactional: false). Use Purchase Receipts or Shipments when you need both stock and accounting entries.
• Batch and Serial Number Support — Full validation of batch assignments and serial number status for each movement type.
• UOM Conversion — Enter quantities in a transfer unit and have them automatically converted to the item's stock unit.
• Stock Availability Validation — Before submission, the system validates that sufficient stock exists at the source location, including checking for future transactions that might be affected.
• Manufacturing Support — The Manufacture movement type allows recording of raw material consumption and finished goods production in a single transaction.

Actions

List View

Workflow: Creating a Stock Movement

1. Navigate to Inventory → Stock Movement in the sidebar.
2. Click ＋ New to create a new Stock Movement.
3. Select the Movement Type (Material Issue, Material Receipt, Material Transfer, or Manufacture).
4. Set the Date.
5. Add line items:
   • Select an Item (only items with Track Item enabled are valid).
   • Set the From and/or To locations based on the movement type.
   • Enter the Quantity and Rate.
   • Assign Batch and/or Serial Number if required by the item.
6. Click Save then Submit to execute the stock movement.

6.2 Inventory Adjustment

Inventory Adjustments allow you to correct stock levels at a specific warehouse location. They are commonly used for physical stock counts, recording damaged or expired goods, theft/loss, or setting opening stock balances.

Schema Overview

Adjustment Reasons

Inventory Adjustment Item Fields

Accounting Entries (on Submit)

Inventory Adjustments are transactional — they create accounting ledger entries to reflect the value change in inventory:

For stock increases (positive quantity):

For stock decreases (negative quantity):

Key Features

• Mixed Adjustments — A single adjustment document can include both stock increases and decreases for different items.
• Automatic Amount Calculation — The total amount is calculated as the sum of all signed item amounts, showing the net value impact.
• Location Validation — The system validates that the specified location exists before submission.
• Batch and Serial Number Support — Full validation and tracking for batched and serialized items.
• Serial Number Status Management — When adjusting serial-numbered items: increases set serial numbers to Active; decreases set them to Delivered. On cancellation, these changes are reverted.

Actions

List View

Workflow: Creating an Inventory Adjustment

1. Navigate to Inventory → Inventory Adjustment in the sidebar.
2. Click ＋ New.
3. Select the Reason for the adjustment.
4. Set the Date and Location.
5. Add line items:
   • Select an Item.
   • Enter a positive Quantity to add stock, or a negative Quantity to remove stock.
   • Set the Rate (valuation rate per unit).
   • Assign Batch and/or Serial Number if required.
6. Optionally add Remarks describing the adjustment.
7. Click Save then Submit.

6.3 Shipment

Shipments record outgoing goods deliveries to customers. They are typically linked to a Sales Invoice and reduce stock at the shipping location when submitted.

Schema Overview

Shipment Item Fields

Accounting Entries (on Submit)

When a Shipment is submitted, the following entries are created:

For return shipments:

Key Features

• Linked to Sales Invoice — Shipments are typically created from a Sales Invoice (via the "Make Shipment" action or auto-shipment on submit). The back reference links the shipment to its source invoice.
• Auto-Shipment — When "Make Shipment On Submit" is enabled on a Sales Invoice, a shipment is automatically created and submitted using the default location.
• Stock Deduction — On submit, stock is deducted from the specified location for each item.
• Stock Availability Checks — The system validates that sufficient stock exists at the source location before submission, including checking future transaction impacts.
• Return Shipments — Create return shipments to record goods returned by customers. Returns reverse the stock movements and accounting entries, and update serial number statuses.
• Invoice Creation — From a submitted Shipment, you can create a linked Sales Invoice.
• Back Reference Tracking — The Stock Not Transferred field on the linked Sales Invoice automatically updates as shipments are created and submitted.
• POS Integration — Shipments created during POS sessions are automatically recorded to the active POS session.

Actions

List View

6.4 Purchase Receipt

Purchase Receipts record incoming goods from suppliers. They are typically linked to a Purchase Invoice and increase stock at the receiving location when submitted.

Schema Overview

Purchase Receipt Item Fields

Accounting Entries (on Submit)

When a Purchase Receipt is submitted:

For return receipts:

Key Features

• Linked to Purchase Invoice — Receipts are typically created from a Purchase Invoice (via the "Make Purchase Receipt" action or auto-receipt on submit). The back reference links the receipt to its source invoice.
• Auto-Receipt — When "Make Purchase Receipt On Submit" is enabled on a Purchase Invoice, a receipt is automatically created and submitted using the default location.
• Stock Addition — On submit, stock is added to the specified location for each item.
• Serial Number Auto-Creation — When receiving serialized items, new serial numbers are automatically created in the system with status Active. You don't need to pre-create serial number records.
• Batch Assignment — Assign existing batches or create new batches inline when receiving goods.
• Return Receipts — Create return receipts to record goods sent back to suppliers. Returns reverse the stock movements and accounting entries.
• Back Reference Tracking — The Stock Not Received field on the linked Purchase Invoice automatically updates as receipts are created and submitted.
• Purchase Rate Sync (Moving Average) — When the valuation method is set to Moving Average, the item's purchase rate is automatically updated to match the current weighted average valuation rate after each receipt.
• Invoice Creation — From a submitted Purchase Receipt, you can create a linked Purchase Invoice.

Actions

List View

Workflow: Receiving Goods

From a Purchase Invoice:

1. Open a submitted Purchase Invoice with Stock Not Received > 0.
2. Click Make Purchase Receipt from the actions menu.
3. The receipt form opens pre-filled with the supplier, items, quantities, and rates.
4. Set the To Location for each item (or set a default and it applies to all).
5. Assign Batch and/or Serial Number for applicable items.
6. Click Save then Submit.

Standalone Receipt:

1. Navigate to Inventory → Purchase Receipt in the sidebar.
2. Click ＋ New.
3. Select the Supplier and set the Date.
4. Optionally select a Back Reference (Purchase Invoice) — this will auto-fill items.
5. Add items, set locations, quantities, and rates.
6. Click Save then Submit.

6.5 Batch Tracking

Batch tracking allows you to group units of the same item into batches identified by a unique batch number. This is essential for industries dealing with perishable goods, pharmaceuticals, or any product requiring traceability.

Schema Overview

Enabling Batch Tracking

Batch tracking is a two-step enablement process:

1. System-level: Go to Inventory Settings and check Enable Batches. This makes batch-related fields visible across the application.
2. Item-level: On each Item record, check Has Batch to require batch assignment for that specific item.

Batch Validation Rules

The system enforces the following batch validations across all inventory transactions:

List View

Workflow: Creating and Using Batches

1. Create a Batch: Navigate to Batch in the sidebar → ＋ New → Enter the batch name, select the item, and optionally set expiry and manufacture dates → Save.
2. Receive with Batch: When creating a Purchase Receipt or Stock Movement (Material Receipt), select the batch in the item row. New batches can also be created inline.
3. Ship with Batch: When creating a Shipment or Stock Movement (Material Issue/Transfer), select the batch to ship from. The system validates stock availability within that specific batch.

6.6 Serial Number Tracking

Serial Number tracking assigns a unique identifier to each individual unit of an item, enabling granular traceability throughout the supply chain. Each serial number has a lifecycle status that is automatically managed by the system.

Schema Overview

Enabling Serial Number Tracking

1. System-level: Go to Inventory Settings and check Enable Serial Number.
2. Item-level: On each Item record, ensure Track Item is checked, then check Has Serial Number.

Serial Number Status Lifecycle

Serial numbers transition between statuses automatically based on inventory transactions:

┌──────────┐    Purchase Receipt     ┌────────┐    Shipment      ┌───────────┐
│ Inactive │────────────────────────▶│ Active │──────────────────▶│ Delivered │
│          │    Material Receipt     │        │   Material Issue  │           │
└──────────┘                         └────────┘                   └───────────┘
     ▲                                    ▲                            │
     │          Cancel Receipt            │      Cancel Shipment       │
     └────────────────────────────────────┘◀───────────────────────────┘

Status transitions by transaction type:

Serial Number Validation Rules

Serial Number Entry Format

Serial numbers are entered as newline-separated text in the Serial Number field:

SN-001
SN-002
SN-003

Each line represents one serial number. For a quantity of 3, you must enter exactly 3 serial numbers.

List View

6.7 Locations (Warehouses)

Locations represent physical storage places — warehouses, stores, bins, or any area where you keep inventory. NkapBooks tracks stock quantities independently at each location.

Schema Overview

How Locations Work

• Per-Location Stock Tracking — Every Stock Ledger Entry records the location. Stock balances are calculated per item per location.
• Default Location — A default location can be set in Inventory Settings. This default is used for auto-shipments, auto-receipts, and as the pre-filled location in Inventory Adjustments.
• Used Across Transactions — Locations appear in:
  • Shipment Items — as From Location (where goods ship from)
  • Purchase Receipt Items — as To Location (where goods are received)
  • Stock Movement Items — as From and/or To locations
  • Inventory Adjustment — as the adjustment location
• Filtering in Transfers — When selecting a back reference (invoice) for a stock transfer, only invoices with unreceived/unshipped items are shown.

Workflow: Setting Up Locations

1. Navigate to Inventory → Location in the sidebar.
2. Click ＋ New.
3. Enter a descriptive Location Name (e.g., "Main Warehouse", "Retail Store", "Cold Storage").
4. Optionally link an Address for the physical location.
5. Click Save.
6. Set your primary location as the Default Location in Inventory Settings.

6.8 Stock Valuation

NkapBooks provides two stock valuation methods to calculate the value of your inventory: FIFO (First In, First Out) and Moving Average. The valuation method is configured in Inventory Settings and affects how the cost of goods sold and inventory values are calculated.

Stock Ledger Entry

Every stock movement creates one or more Stock Ledger Entries — the fundamental building blocks of inventory tracking:

FIFO (First In, First Out)

FIFO is the default valuation method. It uses a stock queue to track the order in which goods were received:

How it works:

1. Inward: When stock is received, a new entry is added to the end of the queue with the purchase rate and quantity.
2. Outward: When stock is issued, the oldest stock in the queue is consumed first. The valuation rate for the outward transaction is based on the rate at which the oldest stock was purchased.
3. Queue Consolidation: If consecutive inward entries have the same rate, they are merged into a single queue entry for efficiency.

Example:

Valuation Rate: The FIFO valuation rate at any point is calculated as: Total Stock Value ÷ Total Stock Quantity.

Moving Average

Moving Average recalculates the average cost after every inward transaction:

How it works:

1. Inward: The moving average rate is recalculated as: New Average = (Current Average × Current Qty + Inward Rate × Inward Qty) ÷ (Current Qty + Inward Qty)
2. Outward: The current moving average rate is used as the valuation rate for outward transactions.

Example:

Purchase Rate Sync: When using Moving Average, each item's Purchase Rate on the Item record is automatically synchronized with the current weighted average valuation rate after each inward stock transfer. This ensures purchase invoices default to the current average cost.

Stock Balance Calculation

Stock balance for any item at any location is calculated by summing all Stock Ledger Entries:

• Balance Quantity = Sum of all quantity values (positive for in, negative for out)
• Balance Value = Calculated based on the selected valuation method (FIFO queue value or Moving Average value)
• Valuation Rate = Balance Value ÷ Balance Quantity

List View (Stock Ledger Entry)

6.9 Inventory Settings

Inventory Settings is a singleton configuration document that controls global inventory behavior, default accounts, and optional features.

Configuration Fields

Default Section

Accounts Section

Features Section

Account Flow Diagram

                    Purchase Receipt                     Shipment
                    ┌──────────┐                    ┌──────────────┐
                    │          │                    │              │
                    ▼          │                    ▼              │
        ┌───────────────────┐  │      ┌───────────────────────┐   │
        │  Stock Received   │  │      │  Cost of Goods Sold   │   │
        │  But Not Billed   │──┘      │       (Expense)       │───┘
        │   (Liability)     │         │                       │
        └───────────────────┘         └───────────────────────┘
                    │                              ▲
                    │         ┌──────────┐         │
                    └────────▶│ Stock In │─────────┘
                              │  Hand    │
                              │ (Asset)  │
                              └────┬─────┘
                                   │
                    ┌──────────────┘
                    ▼
        ┌───────────────────────┐
        │   Stock Adjustment    │
        │   (Expense/Income)    │
        └───────────────────────┘
                    ▲
                    │
            Inventory Adjustment

Workflow: Configuring Inventory Settings

1. Navigate to Setup → Inventory Settings (or search for "Inventory Settings").
2. Set Default Location — Select or create your primary warehouse location.
3. Choose Valuation Method — Select FIFO or Moving Average based on your business needs.
4. Configure Accounts:
   • Stock In Hand — Typically a current asset account under "Current Assets".
   • Stock Received But Not Billed — An interim liability account.
   • Cost of Goods Sold — An expense account under "Direct Expenses" or similar.
   • Stock Adjustment — A dedicated adjustment account.
5. Enable Features as needed:
   • Check Enable Batches if you need to track goods by production batch.
   • Check Enable Serial Number if you need to track individual units.
   • Check Enable UOM Conversion if you deal with multiple units of measurement.
6. Click Save.

Inventory Module Integration Map

The Inventory Module integrates with both the Sales and Purchase cycles:

                         ┌──────────────────┐
                         │  Purchase Invoice │
                         │     (PINV-)       │
                         └────────┬──────────┘
                                  │ auto/manual
                                  ▼
┌──────────────┐          ┌──────────────────┐          ┌──────────────┐
│  Sales       │          │  Purchase Receipt │         │  Stock       │
│  Invoice     │          │     (PREC-)       │         │  Movement    │
│  (SINV-)     │          └────────┬──────────┘         │  (SMOV-)     │
└──────┬───────┘                   │                    └──────┬───────┘
       │ auto/manual               │                           │
       ▼                           ▼                           ▼
┌──────────────┐          ┌──────────────────┐          ┌──────────────┐
│  Shipment    │          │  Stock Ledger    │◀─────────│  Inventory   │
│  (SHPM-)     │─────────▶│  Entries         │◀─────────│  Adjustment  │
└──────────────┘          └────────┬──────────┘          │  (IADJ-)     │
                                   │                    └──────────────┘
                                   ▼
                          ┌──────────────────┐
                          │  Stock Balance   │
                          │  & Valuation     │
                          └──────────────────┘

Best Practices

Stock Movement

• Use Material Transfer to move goods between warehouses without affecting accounting.
• Use Material Issue for internal consumption (samples, damaged write-offs).
• Use Manufacture to record production of finished goods from raw materials.
• Always verify stock availability at the source location before submitting.

Inventory Adjustment

• Perform regular physical stock counts and use Inventory Adjustments with reason "Stock Count" to reconcile differences.
• Use Opening Stock adjustments when migrating from another system or starting fresh.
• Always add meaningful Remarks to explain why the adjustment was made for audit purposes.

Shipments & Purchase Receipts

• Enable auto-shipment/auto-receipt on invoices for streamlined workflows where goods and billing happen simultaneously.
• For businesses that receive goods before billing (or vice versa), create stock transfers separately and link them to invoices via back references.
• Always verify the destination/source location before submitting.

Batch & Serial Number Tracking

• Plan before enabling — Once batch or serial number tracking is enabled on an item, it cannot be disabled.
• Consistent naming — Establish a naming convention for batches and serial numbers (e.g., BATCH-YYYY-MM-NNN or SN-ITEM-NNN).
• Monitor expiry dates — Use Stock Balance reports filtered by batch to identify expiring inventory.

Valuation Method

• FIFO is recommended for businesses dealing with perishable goods or where purchase costs fluctuate significantly.
• Moving Average is simpler and works well for businesses with relatively stable purchase costs or many small transactions.
• Choose your valuation method early — changing it after transactions are recorded may cause inconsistencies.

Inventory Settings

• Configure all four accounting accounts before creating any inventory transactions.
• Set a Default Location to streamline transaction entry.
• Enable only the features you need — each enabled feature adds complexity to every transaction.