---
{
	"_label": "Stock / Inventory"
}
---
For most small business that deal in physical goods, a large part of their net worth is invested in the stock in hand. 

### Best Practice

There are two aspects to good material management:

- **Good housekeeping / visual control:** Keep all your items in separate bins,neatly stacked and labelled.

“A place for everything and everything in its place”

- **Accurate Data:** Accurate data comes from good processes and recording each and every transaction. If you are only partially recording your inventory then your reports will be incorrect

 “Garbage In Garbage Out”

If you have good processes to control movement of goods within your organization, implementation in ERPNext will be a breeze.

### Material Flow

There are three main types of entries:

- Purchase Receipt: Items received from Suppliers against Purchase Orders.

- Stock Entry: Items transferred from one Warehouse to another.

- Delivery Note: Items shipped to Customers.

#### How does ERPNext track stock movement / levels?

Tracking stock is not just about adding and subtracting quantities. Some complications arise when:

- Back-dated (past) entries are made / edited: This affects future stock levels and may lead to negative stock.
- Stock has to be valued based on First-in-First-out: ERPNext needs to maintain a sequence of all transactions to know the exact value of your Items.
- Stock reports are required at any point in time in the past: You have to lookup what was the quantity / value your stock of Item X on date Y. 

To manage this, ERPNext collects all inventory transactions in a table called the Stock Ledger Entry. All Purchase Receipts, Stock Entries and Delivery Notes update this table.