Understanding Inventory Transfers

You can use transfer transactions to record two types of inventory movement:

• Movement between different locations in the same branch/plant.

• Movement between different branch/plants.

An inventory transfer creates two journal entries in the GL. The first journal entry decreases inventory at the original location. The second entry increases inventory at the destination location.

To transfer inventory, you must enter transaction and item information for both the original and destination locations. You can set up processing options to provide default values and to display cost information. If you transfer inventory from a location that results in a quantity of zero but is still associated with an amount, the system automatically creates journal entries to the appropriate accounts to balance the amount to zero.

You can correct a transfer that was made in error by entering a reversing entry. A reversing entry enters a positive quantity and cost back into the item information at the original location and a negative quantity and amount to the item at the destination location. Because the system records each inventory transaction for account purposes, you cannot delete the record.

If you transfer a kit, you must enter a transfer for each component in the kit. The Inventory Transfers (P4113) program enables you to transfer the parent item, although the system does not update quantity information for the components.