What You’ll Learn

By the end of this guide, you’ll understand:

• The difference between Stock In, Out, and Audit
• When to use each operation
• How they affect your inventory
• Best practices for each

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The Three Stock Operations

Kelola provides three ways to manage inventory:

Operation	Icon	Purpose	Stock Effect
Stock In	📥	Add inventory	Increases quantity
Stock Out	📤	Remove inventory	Decreases quantity
Stock Audit	🔍	Correct inventory	Adjusts to match reality

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Stock In: Adding Inventory

What It Does

Stock In records products entering your inventory.

Stock change: ⬆️ Quantity increases

When to Use Stock In

Scenario	Example
Purchasing from suppliers	Received 100 units from vendor
Customer returns	Customer brought back 5 items
Production completion	Manufactured 50 new units
Finding extra stock	Discovered 10 units not recorded
Transfer from location	Received stock from Store B

What Gets Recorded

• Product(s) added
• Quantity received
• Buying price (cost)
• Supplier (optional)
• Date
• Notes

Example Workflow

Purchase Order → Delivery Received → Stock In Recorded → Inventory Updated

Result:

• Before: Coffee Beans = 50 units
• Stock In: +100 units
• After: Coffee Beans = 150 units

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Stock Out: Removing Inventory

What It Does

Stock Out records products leaving your inventory.

Stock change: ⬇️ Quantity decreases

When to Use Stock Out

Scenario	Example
Sales to customers	Sold 3 units to customer
Internal use	Used 10 units for production
Damage/loss	5 units broken, unsellable
Samples given	Gave 2 units as free samples
Transfer to location	Sent stock to Store B
Returns to supplier	Sent 20 defective units back

What Gets Recorded

• Product(s) removed
• Quantity sold/used
• Selling price (revenue)
• Customer (optional)
• Payment status
• Date
• Notes

Example Workflow

Customer Order → Items Picked → Stock Out Recorded → Inventory Updated

Result:

• Before: Coffee Beans = 150 units
• Stock Out: -3 units
• After: Coffee Beans = 147 units

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Stock Audit: Correcting Inventory

What It Does

Stock Audit adjusts inventory to match physical count. Use when system and reality don’t match.

Stock change: ⬆️⬇️ Adjusts up or down to match actual

When to Use Stock Audit

Scenario	Why Audit
Periodic stock count	Monthly/quarterly inventory check
Discrepancy found	System says 100, shelf has 95
After stock loss	Theft, damage, expiration discovered
System errors	Wrong entry discovered later
Year-end closing	Annual inventory verification

Audit vs. Stock In/Out

Situation	Use This	Why
Bought from supplier	Stock In	Normal business flow
Sold to customer	Stock Out	Normal business flow
Counted 95, system says 100	Stock Audit	Correction needed
Found 5 extra units	Stock Audit	Adjust to reality

What Gets Recorded

• Product audited
• Physical quantity counted
• System quantity (auto-filled)
• Adjustment amount
• Reason for adjustment
• Date
• Notes

Example Workflow

Physical Count → Compare to System → Record Discrepancy → Audit Adjustment

Result:

• System shows: Coffee Beans = 147 units
• Physical count: 145 units
• Audit: -2 units adjustment
• After: Coffee Beans = 145 units (matches reality)

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Comparison Table

Aspect	Stock In	Stock Out	Stock Audit
Purpose	Add inventory	Remove inventory	Correct inventory
Direction	Inward	Outward	Adjustment
Normal use	Purchases	Sales	Corrections
Financial impact	Cost recorded	Revenue recorded	Adjustment recorded
Supplier link	Yes	No	No
Customer link	No	Yes	No
Frequency	Daily	Daily	Weekly/Monthly
Who uses	All staff	All staff	Admin/Owner

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Decision Flowchart

Which Operation Do I Need?

Did inventory physically arrive from outside?
├── YES → Did you pay for it?
│   ├── YES → STOCK IN (purchase)
│   └── NO → STOCK IN (return to stock)
└── NO → Did inventory physically leave?
    ├── YES → Was it sold?
    │   ├── YES → STOCK OUT (sale)
    │   └── NO → STOCK OUT (loss/use)
    └── NO → Does system match physical count?
        ├── YES → No action needed
        └── NO → STOCK AUDIT (adjustment)

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Common Mistakes

❌ Wrong: Using Stock In for Found Items

Mistake:

• Found 5 extra units
• Recorded as Stock In

Problem:

• Appears as purchase in reports
• Distorts buying costs
• Messes up supplier history

✅ Correct:

• Use Stock Audit
• Add note: “Found during stock count”

❌ Wrong: Using Stock Out for Damaged Goods

Mistake:

• 3 units damaged
• Recorded as Stock Out with $0

Problem:

• Appears as sale in reports
• Affects revenue numbers
• Wrong financial data

✅ Correct:

• Use Stock Audit (decrease)
• Add note: “Damaged goods - unsellable”
• Or use dedicated “Damage/Loss” reason

❌ Wrong: Multiple Audits for Small Corrections

Mistake:

• Found discrepancy
• Audited immediately
• Found another issue
• Audited again same day

Problem:

• Clutters transaction history
• Hard to track
• Looks unprofessional

✅ Correct:

• Complete full physical count first
• Record all discrepancies
• Single audit for all corrections

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Best Practices

For Stock In

✅ Always link to supplier

• Better purchase tracking
• Vendor performance data
• Reorder history

✅ Record immediately

• Don’t let deliveries pile up
• Same day as receipt
• While unpacking

✅ Check quantities

• Verify against delivery note
• Note discrepancies
• Photo damaged items

For Stock Out

✅ Always link to customer

• Purchase history
• Debt tracking
• Customer analytics

✅ Record before delivery

• Prevents forgotten sales
• Accurate real-time stock
• Better customer service

✅ Note payment method

• Cash flow tracking
• Reconciliation aid
• Audit trail

For Stock Audit

✅ Do regularly

• Monthly: Fast-moving items
• Quarterly: All inventory
• Annually: Full audit

✅ Count when closed

• No transactions during count
• More accurate
• Less disruption

✅ Document reasons

• Why adjustment needed
• Who authorized
• Prevent recurrence

✅ Investigate discrepancies

• Don’t just adjust
• Find root cause
• Fix process if needed

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Integration with Reports

How Each Affects Reports

Stock In affects:

• Inventory valuation (increases)
• Purchase reports
• Supplier performance
• Cost of goods available

Stock Out affects:

• Revenue reports
• Customer purchase history
• Sales analytics
• Inventory valuation (decreases)

Stock Audit affects:

• Inventory accuracy
• Loss/theft tracking
• Shrinkage reports
• Correction history

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Troubleshooting

”Can’t choose Stock Audit”

Cause: Permission restricted

Solution:

• Only Admin/Owner can audit
• Staff need stock_audit permission
• Contact business owner

”Audit shows wrong adjustment”

Check:

• Physical count accuracy
• Pending transactions
• Unit of measure (box vs unit)

“Stock In/Out not changing inventory”

Check:

• Transaction submitted (not draft)
• Sync completed
• Correct product selected
• No error messages

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FAQ

Q: Can I undo a Stock In/Out/Audit? A: Yes, go to History, find the transaction, and delete it. Stock reverts automatically.

Q: What’s the difference between Stock Out and Stock Audit (decrease)? A: Stock Out is normal business (sales). Audit is correction when things don’t match.

Q: Should I use Stock In for opening inventory? A: Yes, for initial setup. Record your starting stock as Stock In with notes “Opening inventory”.

Q: How often should I audit stock? A: A-items (fast movers): weekly. B-items: monthly. C-items: quarterly. Full audit: annually.

Q: Can I audit multiple products at once? A: Yes, Stock Audit allows selecting multiple products for batch auditing.

Q: Do I need to audit if I use Kelola perfectly? A: Still recommended. Physical counts catch: theft, damage, expiration, system errors.