The ongoing challenge of all businesses that promote and sell goods is the investment in stock that sits on shelves or in warehouse bays. The turnover of inventory back into cash is the goal of commerce for these companies. Having enough inventory for the sales that will take place tomorrow and next week is a necessary plan in order to build the business and to lay a path of success. In short, the needed stock for all purposes must be there, and the companies with the best plans will have the greatest revenue and the highest level of customer satisfaction.
The need for order flow — throughput — keeps those involved in warehouse management aware of precisely how many orders have been created and how many units of inventory stock items they will need. In such cases, the purchase orders placed with their company’s various vendors. This streamlines the process by reducing the number of purchase orders created in the system, and enables the items placed on negative stock to be added to existing purchase orders before they go out. SIMMS Inventory Management software incorporates the concept of negative stock, which can be one of the most useful concepts for many businesses to coordinate their stock orders.
When making up sales orders, sometimes users may want to create them while not having the necessary quantity on hand. Negative stock enables users to create those sales orders, save them, and then eventually through the use of backordering, to receive the stock into their warehouses and replace the negative stock with actual items at some future date.