Stock management for a distributor means knowing, for every product, how much is in hand, how it got there and what it is worth. It works only when stock changes by itself from purchases and sales, not from a separate register someone fills in later.
What is opening stock?
Opening stock is what you physically have on the day you start. You count it once and enter the quantity and its cost for each product. Everything after that day is a movement added to or taken from the opening figure.
What is a stock ledger?
A stock ledger is the history of one product: every quantity that came in, every quantity that went out, and the balance after each.
| Date | Particular | In | Out | Balance |
|---|---|---|---|---|
| 01 Oct | Opening stock | 500 | 500 | |
| 02 Oct | Sales invoice SI-00001 | 250 | 250 | |
| 02 Oct | Purchase invoice PI-00001 | 1,000 | 1,250 |
Opening 500 + purchases 1,000 − sales 250 = 1,250. If the shelf says something else, the difference has a date and a document to start looking from.
Which documents move stock?
- Purchase invoice: stock in.
- Sales invoice: stock out.
- Sales return: stock back in. Purchase return: stock back out. See returns and notes.
- Stock adjustment: a correction after counting.
A draft invoice moves nothing; only a finalized one does. See draft, finalized and reversed.
How do minimum stock levels prevent lost sales?
A minimum level is the quantity at which you want to be warned. Set it to roughly what you sell while waiting for a new delivery. When stock falls to that level the product appears on the low-stock list, before the shelf is empty.
How often should you count stock physically?
Count fast-moving and costly items every month and the rest every quarter. Counting a few products each week is easier than closing the shop for a full count.
When the count differs from the book, record a stock adjustment with a reason: damage, shortage, expiry, or stock found. An adjustment keeps the history honest; quietly changing the figure hides the loss.
Should you allow selling more than is in stock?
Normally no. A sale that takes stock below zero means either the purchase has not been entered or the count is wrong. Allow negative stock only if you regularly bill before entering purchases, and enter the purchase the same day.
What is your stock worth?
Stock value is the quantity in hand multiplied by its weighted average cost. It tells you how much money is sitting on the shelves, and which products hold most of it.
In M-Tech Logistics: stock moves from invoices, returns and adjustments only. Each product has a stock ledger, a minimum level and a "how the stock is made up" summary; the Current Stock screen shows quantity, average cost and value, with filters for low and out-of-stock items. See stock in the software. If you buy and sell in different units, read unit conversion next.