Preventing Negative Numbers on Inventory with SAP B1

Proper inventory control is critical to your business. You must be sure that you have sufficient items in stock, and must have accurately updated inventory records. One of the biggest problems in a business process is when you have negative inventory. This condition is always avoided by business people. Not only does it cause lost sales, negative inventory can also reduce customer satisfaction and their loyalty levels. Your customers will feel disappointed when you don't have what they are looking for.


Fortunately, there are several solutions to avoid negative inventory problems, one of which is by improving the operational system in your shop, as well as choosing the right technology to manage stock levels, one of which is SAP Business One. In SAP Business One we can set whether it is permissible for a transaction to cause inventory to have a negative value (below zero). Find out about other Inventory Management capabilities in SAP Business One in the article Ease of Inventory Management with SAP Business One


What is Negative Inventory?


The term negative inventory is a situation where the amount of inventory is less than zero items. This is often a sign that a company has a poor inventory management system. Too many companies assume even these problems are unavoidable and only fix them when they become a problem. SAP Business One can prevent a transaction that causes Negative Inventory.


Causes of Negative Inventory?


Negative Inventory can be caused by various factors, including when the delivery of goods has been recorded but it turns out the goods are still in the production stage, delays in the production process which causes the quantity of goods to be less than required, and if there is an order for goods made from the wrong location, it can result in inaccurate inventory records.

How Does Negative Inventory Impact Business?


How serious is the impact of negative inventory on the company's business? The impact of this negative inventory is that it causes next orders to experience errors or even not be completed. Customers will be annoyed when they place orders for items that are not in stock. This shows that they have to wait until supplies are ready again. Your consumers will certainly feel aggrieved, and will look for another vendor so they can get the item within a few days. Apart from that, negative inventory also causes problems on the recording and accounting side.


Overcome Negative Inventory with SAP Business One


With SAP Business One, you can set whether a transaction is allowed to cause inventory to become negative (below zero). You can set this setting in the Administration > System Initialization > Document Settings > Block Negative Inventory section


Check this option if you do not allow negative inventory. This setting also has 3 options, including:

  • Company : SAP Business One blocks a transaction that causes negative quantity from the entire warehouse.
  • Warehouse: SAP Business One blocks a transaction that causes negative quantity from one of the warehouses.
  • Item Setting: SAP Business One blocks a transaction that causes a negative quantity to occur at the company or warehouse level depending on the settings in the Item Master Data.


That's the discussion regarding Negative Inventory in SAP Business One. SAP Business One is certainly the right business solution to manage your inventory management. As well as minimizing inventory management errors, one of which is negative inventory. Get another interesting discussion about Inventory Management in the next article. Stay Tuned.