How to Manage and Maintain Bad Stock Location

Overview:

In inventory management, bad stock locations are used to segregate defective, expired, or damaged items that cannot be sold or used. Properly managing and maintaining a bad stock location in QNE Software helps ensure accurate inventory records, prevents errors in stock movement, and improves overall warehouse efficiency.

This article provides a step-by-step guide to setting up and maintaining bad stock locations in QNE Software using the Stock Module, along with real-world applications to demonstrate effective bad stock management.

Scenario:

A trading company handling consumer goods has noticed discrepancies in its inventory records due to

defective and expired items being mixed with good stock. This resulted in inaccurate valuation and erroneous

stock movements. To address this, the company needs to:

 Create a designated Bad Stock Location to isolate defective or expired items.

Procedure:

Step 1: Create and Maintain Bad Stock Location

1. Go to the Stock Module – Access the Stock Module where inventory locations are managed.

2. Select ‘Locations’ – Click on Locations to manage stock locations
   
   
   
3. Add a New Location – Click the New Button and fill in the following details:

   • Location Code: Use a code such as BADSTOCK for easy identification.

   • Description: Set the name to Bad Stock Location.

   • Address and Contact Information (Optional)

   • Ensure that Active is checked to make the location available for transaction

Application:

The item N-SSD has an On-Hand Quantity of 100 units stored in the Main Warehouse. Upon inspection, 5 units were found to be expired and need to be transferred to the Bad Stock Location.

To view the actual balance of Item N-SSD:

1. Go to Inquiry Menu Ribbon – Open the Stock Location Balance Inquiry
   
   
   

   • Filter Date – Set the date filter to reflect the current day to get the actual stock count.

   • Select Stocks – Use the filter to show a specific item or leave it blank to display all stocks, allowing a review of stock balances across multiple locations.

   • Click Inquiry – Generate the report to view the results.
     
     
     
     
     The item N-SSD currently has 100 units available under the Main Warehouse (Good Stock Location) and 0 units under the newly created BADSTOCK Location

Step 2: Transfer Items from Main Warehouse (Good Location) to Bad Stock Location

1. Open Stock Transfers Form

   • Go to the Stocks  Module.

   • Select Stock Transfers to initiate the transfer of items.
     
     
     

2. Select Source and Destination Locations

   • Location: Refers to the source location where the item is currently stored. In this example, Main Warehouse is the source location where 100 units of Item N-SSD are stored.

   • To Location: Refers to the destination location where the item will be transferred. In this example, select the previously created Bad Stock Location as the destination.

   • Description: Remarks or reference of transaction 

   • Doc Date: Date of Transaction 

   • Transfer #: Document Number 

   • Ref #:  Transaction Reference Number (Optional)

   • Enter Item Details: Item Code, Specify quantity to be transferred (5 Units in this case) and Unit Price
     
     
     

3. Click the Save Button to Post Transfer
   After transferring the 5 units to the Bad Stock Location, it’s important to verify the changes in the stock location balance.
   
   
   

Step 3: Verify Updates on Stock Balances

1. Follow Application Section STEP 1

✅5 Units have been deducted from the Main Warehouse (Good Stock Location) The original quantity of 100 units has been updated to 95 units.

✅ 5 Units are now reflected in the Bad Stock Location.

Disclaimer:

This process is designed to organize inventory by properly segregating items, ensuring that Good Stock and Bad Stock are assigned to their appropriate locations. Please note that this does not update the actual stock value.

For adjustments related to actual disposal of bad stocks or changes in stock value, a separate process is required.

If you have any questions or need further assistance, feel free to reach out.