How to Transfer Inventory Between Locations Without Cost Differences

Overview

When transferring inventory between locations, using manual inventory adjustments can result in differences between the value removed from the source location and the value added to the destination location.

To avoid these differences, Microix recommends using the Warehouse Transfer (WHT) process when inventory is being moved from one location to another.

Recommended Method: Warehouse Transfer

The Warehouse Transfer process is designed specifically for moving inventory between locations.

With a Warehouse Transfer, Microix manages the inventory costing automatically:

• Microix determines the cost of the inventory when it is transferred OUT of the source location.
• The same cost is then carried forward and used as the IN cost at the destination location.
• This helps ensure that the inventory value removed from one location matches the value added to the receiving location.
• The user does not need to manually determine or re-enter the inventory cost.

This provides a more controlled and consistent method of transferring inventory between locations.

Why Adjustment Costs May Be Different

Inventory adjustments are manual transactions and are not designed specifically for transferring inventory between locations.

For an OUT Adjustment, the cost of the inventory being removed is controlled by the inventory costing method. Therefore, the actual cost calculated by Microix may be different from the amount manually entered on a corresponding IN Adjustment.

For example:

1. An OUT Adjustment is created to remove an item from Location A.
2. Microix determines the actual cost of the item being removed based on the inventory costing method.
3. A separate IN Adjustment is manually created for Location B.
4. If the cost entered on the IN Adjustment does not match the cost calculated for the OUT Adjustment, the inventory values between the two locations will be different.

If You Continue Using Adjustments

If Warehouse Transfers are not being used and you need to transfer inventory using adjustments, process the transactions in the following order:

1. Create and process the OUT Adjustment first.
2. Review the actual cost used by Microix for the inventory being removed.
3. Use that same cost when creating the IN Adjustment for the destination location.

This will help ensure that the value added to the destination location matches the value removed from the source location.

Recommendation

For routine inventory transfers between locations, use the Warehouse Transfer (WHT) process instead of separate IN and OUT adjustments.