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What is negative inventory and how can I prevent it?
What is negative inventory and how can I prevent it?
Updated over a week ago

Negative inventory is an accounting trick to keep you from overselling even when orders are deducted from a location that has less inventory available in SKULabs than was found on the shelf. When locations or warehouses are combined to push your stock levels to your sales channels, we'll add all of these locations together to come up with the total available inventory.

Where does negative inventory come from?

Incorrect on-hand inventory

When you start with more inventory than is registered in SKULabs, your picking staff can still scan items they have in their hand or override the system to say they are shipping something your inventory system says you don't have in that location.

Picking mistakes

Usually, negative inventory is a mistake made by the picking team. Tracking this allows us to account for the transaction without either blocking them from fulfilling (slowing down the process) or releasing the inventory for sale to someone else (overselling).

Automatically deducted orders

If you're shipping outside of SKULabs or have a POS connected to SKULabs, we may in rare cases default to a location that does not have any inventory as a means of quickly deducting an order from your warehouse accountably. When we know the order came from a specific warehouse but it's not assigned this will ensure the inventory transaction is accounted for properly.

How to correct for negative inventory

Removing the negative inventory may increase your total available inventory.

Blindly resetting negatives to zero may cause you to oversell if another location has an equal amount of inventory overage due to picking mistakes or receiving mistakes made by your team.

If this warehouse is used in combination with another warehouse, or if you have multi-location inventory you should use the inventory reconciliation feature to merge and reconcile your inventory counts. Alternatively, use a cycle count to update all locations for an item making sure your overall true on-hand inventory remains unaffected.
If you have one warehouse with warehouse-based inventory, you can safely zero-out your negative on hand inventory.

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