Prevent Negative Inventory Quantities

Significant accounting discrepancies can occur when inventory quantities are allowed to go negative. In Odoo’s standard functionality, users can process more items than what is reserved for both the manufacturing process and general transfers. So, if a location doesn’t have enough physical stock available, this will result in a negative inventory balance. These discrepancies will slowly build up, negatively impacting a business’s COGS and inventory valuation. They will remain unnoticed until financial reconciliation, which generally leads to a substantial cleanup if left unchecked for extended periods.

Odoo’s standard approach prioritizes operational flow, allowing for the movement and consumption of products regardless of actual inventory levels, thereby avoiding interruptions to business processes. While well-intentioned, this creates serious accounting problems and inventory inaccuracies without built-in safeguards.

Steersman’s Odoo Feature: Prevent Negative Inventory Quantities provides essential checks and balances by:

1. Blocks normal inventory users from moving more than what is reserved on picks, deliveries, and internal transfers.
2. Allows users to flag problematic transfers for review
3. Enables role-based inventory corrections where only authorized users can resolve flagged discrepancies
4. Prevents excess component consumption in manufacturing processes
5. Provides visibility into potential user errors or genuine inventory discrepancies
6. Inventory discrepancy reports for managers to identify and resolve problematic transfers or manufacturing orders quickly

Install and Configure

To enable this feature, go to the Settings app and in the Inventory category, allow the ‘Prevent Negative Inventory Quantities’ feature under the ‘Operations’ section and click SAVE.

Handle Inventory Transfer Discrepancies

Suppose a user attempts to validate a transfer and tries to move more than what is reserved. In that case, they will be met with a pop-up outlining the specific line item(s) that may trigger an inventory discrepancy. This safeguard enables the user to correct mistakes (e.g., inputting incorrect quantities or attempting to retrieve a product from the wrong location) or escalate the issue to an inventory manager for review.

If an inventory transfer is ‘Flagged’ by a user, the transfer will appear in the Inventory Discrepancies report in the Inventory app. This report will display all flagged inventory transfers (Picks, Pick Component Transfers for MOs, Internal Transfers, and Deliveries) that attempt to move more than the reserved amount, providing the inventory manager with a list of transfers to review and resolve.

This report allows inventory managers to address any flagged inventory transfers for inventory discrepancies. In cases where there is enough in the location to move without causing negative inventory, the inventory manager can click RESOLVE when validating the transfer.

Handle Manufacturing Consumption Discrepancies

Similarly, suppose a manufacturing user attempts to mark a Manufacturing Order as done but is attempting to consume more than what is reserved. In that case, Odoo will display a pop-up specifying which component(s) may trigger inventory discrepancies. During the manufacturing process, the safeguard will allow the user to correct any mistakes (i.e., input wrong quantities) or escalate the issue to a Manufacturing manager for review.

If the manufacturing order is ‘Flagged’ by a user, the MO will appear in the Inventory Discrepancies report in the Manufacturing app. This report will display all flagged MOs that attempt to consume more components than reserved, providing the manufacturing manager with a list of all MOs to review and resolve.

This report allows manufacturing managers to address any and all flagged MOs for inventory discrepancies. In cases where there is enough available stock in the location to consume an extra component without causing negative inventory, the manager can click RESOLVE when finishing the manufacturing order.