Introduction to inventory management

Inventory management is a core part of the Brightpearl system. This document is designed to provide a high-level overview of stock management within the system.

Basic principles

The following are the basic principles of stock management within Brightpearl:

  • Inventory levels can never go below zero
  • All inventory should have a cost price (asset value)
  • The current inventory level is the sum of all inventory movements 'in' and all inventory movements 'out', allowing retrospective reporting
  • Inventory movements cannot be back-dated; they always occur in real time

Inventory levels

A product has several different types of inventory level, each of which details information about how many units of a product are available in various states.

  • In stock: the total number of units in the warehouse
  • On hand: how many units are available to sell
  • Allocated: how many units are reserved for current orders

The 'on hand' level is the level pushed to ecommerce channels, and is calculated by subtracting the 'allocated' level from the 'in stock' level.

Read more about inventory levels.

Allocation

Allocation is the process of reserving inventory to existing sales in order to ensure they can be completed, and to prevent overselling.

Inventory can be allocated in one of two ways:

  1. Directly to a sales order
  2. On a goods out note (i.e. fulfilled inventory is automatically allocated)

Only inventory that is in stock can be allocated.

Accounting for inventory

Inventory management is very closely tied to accounting. Every change to inventory levels will create an accounting entry, since each unit of inventory has an asset value.

Therefore cost prices need to be accurate in order to ensure correct accounting.

Read more about how Brightpearl accounts for inventory. 

Adding stock

Inventory is added into Brightpearl in a number of ways:

  • Through a manual inventory correction (on-screen, by CSV import, or using WMS).
  • Receiving goods on a purchase order.
  • Receiving goods from a customer on a sales credit.

Every change is recorded on the inventory audit trail (Products > Inventory audit trail).

Read more about adding inventory.

Removing stock

Stock is removed from Brightpearl in a number of ways:

  • A goods-out note for a sales order is marked as shipped.
  • A manual correction is made.
  • Through being unreceived on a purchase order, or a batch being deleted.

Every change is recorded on the inventory audit trail (Products > Inventory audit trail).

Read more about removing inventory.

Warehouses and locations

All inventory is recorded in a location. Locations can be optionally grouped into zones. Zones are within a warehouse

Locations are defined to a maximum of four levels:

  • Aisle
  • Bay
  • Shelf
  • Bin

A location is normally listed in the format 'Aisle.Bay.Shelf.Bin' - for example, a location of Aisle: A1, Bay: B34, Shelf: S10, Bin: 100X would be listed as 'A1.B34.S10.100X'.

It's not necessary to use all four levels - a simple warehouse may only have aisles defined, for example. 

There are three types of location management. Your Brightpearl account will be set to one of these, and once you have started trading it is not recommended you change this method without professional support.

  • No location management: locations are not used at all
  • Standard location management: all inventory of a single product is always located in one defined location (which may be shared with other items).
  • Multi-concurrent location management: each delivery of goods can be placed in a different location, so inventory of one product may be stored in multiple places.

Read more about warehouses or locations.

Moving inventory between warehouses

When items are moving between warehouses, they are not marked as in stock and are not available for sale (i.e. they are excluded from on-hand levels). They are placed in a 'quarantine' location in the destination warehouse until they have been released (see the report under Products > Inventory in transit).

Read more about warehouse transfers.

Video

An overview of the concepts behind inventory management with Brightpearl. Essential viewing before you start diving into the more detailed videos that cover each process.

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