In Retail POS, items may have negative inventory due to insufficient stock being sold in-store or online, or items sent with insufficient stock on transfers or vendor returns. If you've integrated with one of our partners through the API, items may also have negative inventory if the integration sells or transfers items.

Some common causes of negative inventory include:

• The wrong quantity was accidentally entered on a purchase order, transfer, or vendor return.
• The in-transit quantity wasn't received on an incoming purchase order or transfer.
• Items were physically received from a shipment, but no purchase order or transfer was created.
• An item was accidentally sold instead of another similar item.
• An item was sold instead of being put on special order.
• A service or labor item was sold as Single item type instead of Non-inventory.

If stock on your items goes into the negative, you can identify the cause and correct the Quantity On Hand (QOH) through the Negative inventory report.

Selling items with insufficient stock

If you have the Create Separate Sale Lines When Adding Units of the Same Item setting enabled, you will not see a warning that there is not enough stock of the item. Navigate to Settings > General Options to view this setting in the Registers section.

If you add more quantity of an item to a sale than you currently have in stock, you'll see an alert on the Sell screen (desktop only). If you then sell more quantity than you currently have in stock, the item will have a negative QOH and appear in the Negative inventory report.

If you're an Omnichannel merchant, you can change your item's visibility to hide the item when it is unavailable.

1. Navigate to Products and select your item.

2. Use the Visible dropdown to select Visible when in stock, Hidden, or Always Visible.

   

3. Click Save

If your item is set to Always Visible, customers will see an "Out of stock" or "On backorder" message on the item's page, depending on your selling with insufficient stock settings. You can also customize your delivery time display.

If a customer then purchases a larger quantity of the product than you have in stock, the item will have a negative QOH in Retail POS and your eCom back office. The item will also appear in the Negative inventory report.

Sending items with insufficient stock

If an item on a transfer has a QOH of zero or less, the Available column will be highlighted in red on the Transfer page.

If an item on a vendor return has more quantity in its Return qty. field than Stock field, the item row will be highlighted in red, and an Over return alert icon will appear.

If you send more quantity of an item on a transfer or to a vendor than you currently have in stock, the item will have a negative QOH and appear in the Negative inventory report.

Investigating causes of negative inventory

You can investigate the cause of negative stock in the Negative inventory report.

1. Navigate to Reports > Negative inventory.

   

2. If applicable, click Advanced and check the Show eCom orders box to include online items with backorders in the report.

   

3. Optionally, use the dropdowns to filter by Location, Default Vendor, and/or Reason and click Search.

4. Review the Inventory Adjustment Reason column. Reasons include:

   • Sale (the eCom Order column will indicate No for in-store sales or Yes for online sales)
   • Removed for transfer
   • Returned to vendor

   

5. Review the Purchase order and Transfer columns. These indicate if more of the item has been ordered to replenish the stock.
6. Review the other columns for more information on why the item had insufficient stock at the time of the negative inventory adjustment.

If you need more information regarding when the item went into negative inventory, click the item's name and navigate to the History tab.

Correcting negative inventory

Depending on the cause of your negative inventory, you can resolve the negative QOH using different methods.

• Sale error: Refund or void the sale, then repeat the sale with the correct information. Note that this may reverse payments from the sale. If completing an exchange as part of the return, you may want to adjust the item's price to match the negative inventory item.
• Transfer error: Return the transferred item.
• Vendor Return error: Navigate to the vendor return. Select More Actions > Reopen. Then edit and resend the vendor return.
• Purchase Orders and Transfer errors:
  • If there is an incoming purchase order or transfer, the in-transit quantities may not have been received before the item was sold. If so, receive the in-transit quantities on any outstanding purchase orders or transfers to correct the negative QOH.
  • If there are no incoming purchase orders or transfers listed, you can create a purchase order or transfer what you need to correct the negative QOH, or adjust the QOH manually.

If none of these methods are possible, receiving additional units will cause the negative inventory to resolve automatically. You can manually correct the negative QOH in the Negative inventory report.

1. In the Negative inventory report, click the item's QOH.
2. Click the Inventory tab in the sidebar.

3. Under Add Inventory, enter the correct quantity.

   

4. Review the cost and vendor.
5. Click + Add Inventory.

If you need to correct the negative QOH of several items, you can do an inventory count with negative inventory instead of manually correcting the QOH of each item individually.

Doing inventory counts with negative inventory

If you have several items with negative QOH to correct, you can do an inventory count instead of manually correcting the QOH of each item.

Before starting an inventory count, identify what caused the items to have negative inventory. For example, if items were sold but not received on an incoming purchase order, receiving them on the incoming purchase order will correct their negative QOH.

1. Navigate to Inventory > Inventory Counts.

   

2. Click + New Inventory Count.

   

3. In the Name field, enter a name for the inventory count. We recommend naming it based on the situation and time of year for reference (e.g. Negative Inventory - May 22, 2019).

   

4. Click Save Changes. You will be automatically redirected to the new inventory count page.

5. Click the Missed tab.

   Your entire inventory will be listed because the items haven't been counted yet. Once you start counting items, the items will move from the Missed section to the Count and Totals sections.

   

   Inventory isn’t considered in stock when it's reserved for special orders, layaways, and work orders. It isn’t included in inventory counts and shouldn’t be counted.

6. Click the Should have column header to sort the column. This moves items with negative QOH to the top of the list.

   

7. If you have positive quantities of an item:

   In the Count column, enter the item quantity by scanning each item, or by counting the number of items and typing that number. This will automatically remove the item from the Missed list.

   

   If you have zero of an item:

   Click Zero next to the item. To zero multiple items at once, click each item's checkbox, then click Zero Selected Items.

   

8. Repeat step 7 for each item you are counting. Leave the Count field for all other items blank to prevent them from being affected by the inventory count.

   You can review your counted items by clicking on the Count tab and referencing the Counted Items section.

   

9. Click the Totals tab.

10. Review the Should have, Count, and Change columns for each item.

    The Change quantity is the total of how much stock will be added to correct the negative QOH once you reconcile the inventory count.

    

11. Once you've reviewed the inventory count and are sure of the inventory adjustments it will cause, click the Reconcile tab.

12. Click Reconcile inventory.

    

13. A pop-up will appear confirming that this action can't be undone. Click OK.

After the reconciliation is complete, a temporary banner will display confirming the number of items reconciled.

You can click the Shrinkage tab to view the amount of inventory lost due to shrinkage.

Changes made to your inventory by this count can be found by navigating to Reports > Inventory Movement Logs.

What's next?