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October 24, 2023

You can’t always be proactive about errors, not even with inventory software in place. Negative inventory is a relatively widespread problem even for those using automated inventory apps. In this blog post, we’ll dive into the problem of stock levels falling below zero, what it can lead to and how to fix this in your inventory control software. 

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Where does the negative stock situation come from?

Negative inventory is a sign that things went wrong at some point and, if not addressed in a timely manner, can get more wrong down the road. Here are some of the reasons why your stock can go negative:

  • Transferring inventory to/from a wrong warehouse. This is bound to mess up inventory levels, resulting in misleading quantities and occasionally negative inventory records at one of the locations.
  • Selling or producing more than is available. If a software user reserves more inventory for upcoming sales or production than there is in stock in reality, whether by mistake or knowingly, the company is likely to end up with negative inventory sooner or later.
  • Inventory adjustments that are unaccounted for. Fixing errors through inventory adjustments is the quickest yet least reliable way in terms of accuracy. While making an inventory adjustment make sure to fill out the memo field with the reason for changing items’ quantity on hand. Otherwise, it’s hard to retrace the steps and determine where negative numbers came from.
  • Inventory shrinkage identified during an inventory count. If inventory loss is discovered on time this is a lucky development of events. However, it also calls for further investigation.
  • Errors from QuickBooks Online carried into inventory software. If a user doesn’t stick to one software for inventory data entry and revision this might cause occasional data conflicts, including negative inventory. 
How to determine the root cause of stock going into a negative quantity?

Whatever the reason, HandiFox Online makes it easy to get to the bottom of this issue. Go to Item List, enter the name of an item with a negative quantity in the search field or, alternatively, click on the Total QOH column to get all items sorted from lowest to highest quantity.

In the Actions column, click on the down arrow next to Edit and choose Transactions in the drop-down menu. This will take you to the Inventory Transactions by Item report.

Select the Site, specify the Date Range and click Apply. The software will generate a list of transactions for the specified item, date range and storage locations. Your inventory managers can take it from here by clicking on transaction numbers and examining related transactions.

You can run the same report by going to Reports->Inventory Transactions by Item.

How to avoid negative inventory in the future?

HandiFox Online has a setting that can stop stock from getting into a negative quantity altogether. To turn it on, go to Users Settings ()->Settings->Inventory->Don't allow negative QOH values

With this setting enabled, a user is warned and safeguarded against saving transactions with negative inventory.

Negative inventory is less intimidating if you know how to investigate it and, what’s even better, prevent it. HandiFox gives you a live look at and full control of your inventory- take a free 14-day trial now.

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