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Concept of Negative Stock

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Allow Negative Stock function in Transaction Option

In a perfect business scenario you should not sale more than what has been recorded in the system.

By default FusionERP 8 will stop you from selling or transferring the product with no stock. FusionERP 8 helps you in receiving /checking the goods efficiently and faster bar-coding / pricing without errors backed by a powerful ordering system so that you can say “NO” to “Negative Stock”.

However there can be several reasons for using the negative stock functionality subject to the specific business requirements of your industry, for instance

Sales of finished products to customers.  If you are a grocery shop owner and doing the repackaging of bulk goods. In an effort to avoid any delay in selling your repackaged products to customers, you can choose to allow negative stock posting since the product being sold will come after a delay or can be delivered directly to the customer from the packaging unit,  i.e. there is a delay in the production entry.
The alignment of inventory/stock movement with purchase and sale process where due to some reason, the reception of inventory was not maintained on time, resulting in interruption of process of sale.
If you products which comes pre bar-coded and have a fixed selling price. You have received the product from supplier on goods delivery note and you are yet to receive the purchase invoice. The customer is in hurry and you need to sale the product. You may choose “Allow Negative Stock =Yes” function instead of getting the "No Stock” message during the sale.

Important Note: Negative stocks/values for products can raise many questions for auditing and accounting purposes at the end of financial periods.

You must have a plan how to clear such stocks. FusionERP 8 Physical Stock taking process will help you in this regards.


How Negative Stock works in FusionERP 8?

You can choose “Yes or No” at “Allow Negative Stock” found in the transaction option.

       Key Information

Online Stock is calculated irrespective of date.

It will not give you the same result as date wise stock register might give, instead the online stock is calculated irrespective of date.

Type of Voucher

Allow Negative Stock = No

Allow Negative Stock = Yes

Sale: Online Stock Calculation

Cannot Sale if a product is not in stock.

Can Sale.
Note: Can sale a product even it’s never purchased (no child).

Sale (in case of Exchange): This is not related to online stock

If no Sale = no Exchange is allowed.

Cannot exchange Qty > (Sale – Sale Rerun) Qty.

No Check on the QTY.

(but sale qty > Zero)

Sale Return:

This works same as Sale (in case of Exchange)

This works same as Sale (in case of Exchange)




Purchase Return:

Cannot Return Qty > Current Stock

Can Return Qty > on Line Stock.
(But must have Purchase Qty > Zero i.e. can not make return entry if the product was never purchased)





Same as Sale

Same as Sale

Stock Transfer

Same as Sale

The product you want to transfer must have child(s) as the product without child can not be selected from the list.


The product you want to transfer must have child(s) as the product without child can not be selected from the list.


       Key Information

Online Stock Calculation Formula  = (Opening Stock + Purchase – Sale – Purchase Return + Sale Return + Transfer In – Transfer Out + Production – Consumption – Wastage – Shortage + Excess)

       Key Information

There is no impact of Negative Stock in Sale Invoice (Touch POS)


Important Note:  The stock verification for these transactions is based on the Total Online Stock Available which is independent of date of transaction.  This is often mistaken with date wise stock register.

For example if you have a purchase entry of 100 units of a product at 12-Jan-2008  and you are  making a sale entry on 05-Jan-2008, it will be allowed even if you choose “Negative Stock Allowed = No” at the sale transaction option.


Important Note: The online stock calculation is based on the Location.  However Warehouse is not considered in the online stock, since we use the Warehouse on the line level.


Important Note:  If you split the data after a financial year then sales transaction is not carried forward. In this case you may not be able to make sales return of older period. We suggest that you split your data after a period of your return policy.


FAQ :  What is the effect of negative stocks in stock  valuation, i.e. moving average?

Answer :  As you know negative stock will have negative value, which will have direct impact to financials.

For example if you have a material of Qty 10, out of which 5 qty have a cost of Rs.10 and balance at a cost of Rs.20, total worth Rs.150.00 in stock.

If you enable negative stock in system and sale 20 Qty, the system will show stock of negative 10 and value Rs.150/- (Total Quantity 10 * Average Rate 15).


FAQ : Why my stock is having negative stock value when the stock qty is ZERO?

Answer : FusionERP  6 uses MAP (Moving Average Price) Price Control to value the product in stock. And if there is a price difference between Purchase Value and Purchase Return Value. In this case, the price difference will be credited to your stock and since the price difference value is in excess of your current stock value, this negative value took place.