By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.
Stock movement is an integral part of stock management. Without efficiency and rigor, you risk reducing your efficiency and therefore your returns. But what does stock movement involve? How can it be optimized? We explain everything you need to know about this essential concept for a product company.
Stock movement: what is it?
Stock movements are transfers between several locations, such as warehouses.
Within a company, all stock movements are inventoried on a single screen or document to give a clear view of these movements and analyze stocks at a glance. Each movement results in the issue of a receipt, return, issue, return or transfer between shops.
By recording or processing each stock movement, you know exactly how much stock you have left, and how to value it. Analyzing these movements is an integral part of your overall stock management.
The different types of stock movement
There are several types of stock movement. Here are the main ones:
Stock receipts
Goods receipts: these are receipts of products purchased from suppliers.
Product returns: these are products returned by customers which are then put back into stock.
Finished production: finished products are added to stock after production.
Outgoing goods
Dispatch of orders: products are dispatched to fulfil customer orders.
Returns to suppliers: for example, returns of defective or surplus goods to suppliers.
Internal consumption: the use of products for the company's internal needs, such as raw materials for production.
Destruction or scrapping: damaged or obsolete products are removed from stock.
Stock transfers
Internal transfers: products are moved from one location to another within the company.
Inter-branch transfers: this is a transfer of stock between different branches or sales outlets.
Stock adjustments
Physical inventories: these are adjustments to stock quantities after a physical inventory to correct discrepancies.
Error corrections: these are adjustments to correct data entry or management errors.
Stock reservations
Customer order reservation: stock is reserved for specific orders.
Production reservations: stock is reserved for future production requirements.
These different types of stock movement make it possible to monitor and manage product flows within the company.
Essential documents for stock movements
Certain documents are essential for monitoring, controlling and recording the various stock movements:
Receipt slip: this is a document used to record the receipt of goods from suppliers. It details the quantities received and product descriptions, and enables you to check that deliveries correspond to orders.
Delivery note: this provides a record of goods dispatched to customers or transferred between different company sites. It includes details of the items shipped, quantities and destination information.
Purchase order: this is used to formalize replenishment orders with suppliers. It specifies the items ordered, quantities, prices and delivery terms. The supplier purchase order does not really have a direct impact on stock movements; it is more a question of anticipating future products, which is then formalized by the goods receipt slip. On the other hand, the customer order form enables stocks to be held pending delivery to the customer (an issue), formalized by a delivery note.
Issue slip: this is a document that records stock issues for various reasons, such as sales, withdrawals for production, or returns to suppliers. It is used to track stock reductions.
Returns slip: this is used to record returns of goods, whether they are returned by customers or sent back to suppliers. It includes the reasons for the return, the quantities and the item references.
Transfer note: this is a document used to record the transfer of stock from one location to another within the company, for example, from a warehouse to a sales outlet. This ensures that internal movements can be traced.
Physical inventory: this is a detailed listing of existing stocks obtained by physical counting, enabling actual stock levels to be compared with records. It is used to adjust discrepancies in stock management systems.
Stock sheet: this is a document or record in a computerized system that continuously tracks the entry and exit movements of each item. It provides an overview of the quantities available at any given time.
Why is stock movement an important issue for a company?
By managing stock movements effectively, you can make a significant contribution to the value of your stock. In other words, your company can maintain optimum stock levels while maximizing their value. Here are some of the benefits of implementing good stock movement management:
Reducing obsolete or expired stock
By optimizing stock movements, your business can ensure that the oldest items or those close to their expiry date are used or sold first (FIFO principle - First In, First Out), thereby reducing losses due to obsolescence or expired products.
Improved stock rotation
Faster stock rotation means that products spend less time in the warehouse, reducing the cost of ownership and increasing stock profitability.
Minimizing surpluses and stock-outs
Effective management of stock movements avoids both overstocks and stock-outs. Your business does not overstock unnecessarily, allowing you to free up cash and avoid stock-outs.
Optimize storage costs
By adjusting stock levels to actual requirements and limiting unnecessary stock, effective management reduces storage costs. This helps to maintain optimum stock value without excessive costs.
Aligning stock with market demand
Well-managed stock movements enable supply to be better aligned with demand. In other words, the company has the right products at the right time. The value of stocks thus increases potential sales and customer satisfaction.
Good returns management
Efficient stock movement means good returns management. Returned products are identified quickly, storage space is optimized, and reclaimable items are easily reintegrated, reducing processing times and costs, improving traceability and minimizing errors.
Better financial decision-making
Accurate and efficient management of stock movements provides reliable information for valuing stocks on the company's financial statements.
Common challenges in managing stock movements
The movement of stock can have an impact on the efficiency of operations. So you need to be able to address a number of challenges:
Human errors, particularly those linked to manual data entry: these are common and can lead to inventory discrepancies and financial losses.
Returns and complaints management: this involves dealing with returned products, which complicates stock tracking and can disrupt the supply chain if returns are not properly integrated.
Adaptability to change: a business needs to be able to adjust stock levels quickly to fluctuations in demand to avoid overstocking or out-of-stock situations, which requires flexible and responsive forecasting and replenishment systems.
Real-time monitoring: you need real-time visibility of stock movements to avoid shortages or overstocks.
Stock traceability and compliance: you have legal or regulatory obligations that require rigorous traceability of stock movements, especially if your company operates in a sensitive sector such as food or pharmaceuticals.
How does stock management software optimize stock movements?
Earlier, we mentioned human error and, more generally, the challenges involved in managing stock movements. The use of stock management software helps to minimize these errors by automating the processes of entering and removing stock and by ensuring greater accuracy and traceability of data.
Erplain, as a complete Saas solution tailored to the budget of VSEs and SMEs, meets all your stock movement management needs. It helps you reduce errors, save time and anticipate stock shortages. Stock movements are updated after each purchase and sales order. You receive alerts and notifications to anticipate stock shortages or overstocks.
Finally, the software lets you draw up detailed data reports to optimize stocks and improve your cash flow, as well as evaluating merchandise in real time. Ultimately, you maximize your performance and identify the best customers and sales to perfect your sales strategy.
Erplain is an intelligent solution for managing your very small business in real time.
