From the main warehouse to the store, from store to store, from warehouse to vehicle. In any multi-location business, goods are constantly changing hands.
When these movements are not recorded, both warehouses show incorrect balances. The goods still appear in the sending warehouse, and do not show up at all in the receiving warehouse.
In this article, we explained how to issue a transfer receipt, how to track goods in transit, and why the acceptance step is necessary.
Table of Contents
What is a transfer receipt?
A transfer receipt is the document that records the stock movement from one warehouse to another. It is not a sale or a purchase; total stock remains unchanged, only its location changes.
This distinction is important from an accounting perspective. A transfer does not generate revenue or expenses, but it directly affects warehouse-based reports.
The receipt includes the sending warehouse, receiving warehouse, products, and quantities. If lot or serial tracking is used, the specific batch being transferred is also recorded.
Single-step or two-step?
There are two approaches to transfers, and the choice depends on distance.
Single-step transfer happens instantly: goods leave one warehouse and enter another. This is sufficient for warehouses within the same building.
Two-step transfer, however, is split into dispatch and acceptance. Goods leave the sending warehouse, remain "in transit" for a period, and enter the receiving warehouse upon acceptance.
The second method is mandatory between warehouses in different cities. Otherwise, goods that have not yet arrived would appear in the receiving warehouse's balance and sales could be made based on those goods.
The concept of stock in transit
Stock in transit is goods waiting between two warehouses. They are neither at the sender nor at the receiver, but they are part of the total inventory.
Monitoring this intermediate state is critical. If the quantity in transit is constantly increasing, either the acceptance step is not being performed or the goods are not actually arriving. Both must be investigated.
Practical tip: maintain an aging list for transfers stuck in transit. Records that have been in transit for more than three days should be followed up.
This tracking is the warehouse equivalent of open order tracking, which operates on a similar principle.
Step-by-step transfer flow
1. Request or decision
A transfer either starts with a request from the receiving warehouse or a distribution decision from headquarters. Recording the request eliminates future questions like "who asked for this?"
2. Picking and dispatch receipt
Products are picked and a dispatch receipt is issued. Picking by scanning barcodes largely prevents quantity errors; check out the barcode management article.
3. Shipment and document
A delivery note is issued when the goods go into transit. The fact that you are shipping to your own warehouse does not remove the documentation obligation; you can check the e-delivery note article.
4. Acceptance
The receiving warehouse accepts the goods by counting them. Accepting by count means catching any discrepancies today rather than during the next inventory count.
What to do if there is a discrepancy?
The quantity sent may differ from the quantity accepted. This is not something to hide; it is a signal caught by the process.
Discrepancies originate from three sources: picking errors, transit damage, or miscounting during acceptance. Each requires a different action.
It must be defined who is authorized to close out discrepancies. Allowing the person receiving the goods to correct discrepancies on their own eliminates control; authorization establishes this distinction.
Recurring discrepancies point to a process issue; we discussed the general approach in the count discrepancy article.
Documentation obligation
Delivery notes must also be issued for shipments between your own warehouses. This is a frequently skipped issue that causes problems during audits.
The document must be kept with the vehicle as long as the goods are in transit. With electronic documents, this is ensured by being queryable through the system.
This is where having your branch and warehouse structure properly defined comes in handy; you can check out the company, branch, and warehouse structure setup article.
Transfer receipts are entered in the inventory module using the same screen logic as other receipt types; thanks to standard document entry, the team doesn't have to learn a new screen.
Inter-warehouse ordering
Some transfers start with a headquarters decision, and some with a request from the receiving warehouse. In the latter case, recording the request ensures the process is traceable.
Requests communicated verbally or via messages get lost. The store manager thinks they will get what they asked for, but headquarters never saw the request; as a result, the shelf stays empty and someone is blamed.
The inter-warehouse order structure closes this gap. The request is logged, fulfillment status is tracked, and any remaining quantity in partial fulfillments stays open. Thus, the "I asked for it but it didn't arrive" argument is backed by records.
The request list is also a planning input. Frequently requested products indicate that the critical level in that warehouse has been incorrectly set. When the level is corrected, the number of requests decreases naturally.
This flow is especially important in chain structures; we discussed the headquarters-branch relationship in the chain store management article.
Reducing transfer traffic
Transfers are not free. Every movement generates vehicle, fuel, personnel time, and paperwork. Therefore, the number of transfers is an efficiency indicator.
High transfer traffic is usually the result of improper distribution. Because goods are not sent to the correct warehouse from the start, they have to be moved later. This requires looking at supply planning.
Part of the solution is reviewing order routing rules. When shipments are made from the warehouse closest to the customer, transfer needs decrease.
The other part is properly setting warehouse-based critical levels. Having each warehouse hold stock according to its own sales velocity reduces emergency transfers; we addressed this balance in the multi-warehouse stock management article.
Consolidating transfers also reduces costs. Instead of a single daily trip, two planned trips a week are more economical for most operations; you can check out the shipment planning article.
Frequently asked questions
Does transfer affect costs?
It depends on the costing method. Clarify how shipping expenses will be allocated with your financial advisor.
Is vehicle stock also considered a warehouse?
In van sales operations, yes; the vehicle is defined as a warehouse. We explained this model in the van sales article.
Can transfers be done via mobile?
Warehouse operations are suitable for mobile use; picking and acceptance can be completed in the field.
Can stores request goods from each other?
Yes, inter-warehouse ordering fulfills this need. We covered the chain structure in the chain store management article.
Transfer is the most frequent and most frequently skipped stock movement. Making the acceptance step mandatory is the cheapest way to keep warehouse balances consistent.
By consulting with the EQLEM team, you can set up your warehouse transfer flow and stock-in-transit tracking.