What You’ll Learn

By the end of this guide, you’ll be able to:

• Understand how inventory moves in Kelola
• Know the difference between Stock In, Stock Out, and Stock Audit
• Track stock in, out, and adjustments
• See how transactions affect stock levels
• Manage stock transfers between locations
• Choose the right operation for each situation

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The Stock Flow Cycle

Inventory in Kelola follows a simple lifecycle:

Stock In → Inventory → Stock Out
(Purchases)          (Sales)

Stock In (Adding Inventory)

When to use:

• Buying from suppliers
• Receiving deliveries
• Manufacturing/production
• Returns from customers

Result: Stock quantity increases

Inventory (Holding)

What happens:

• Stock sits in inventory
• Available for sale
• Tracked in real-time
• Alerts when low

Stock Out (Removing Inventory)

When to use:

• Selling to customers
• Internal use
• Damage/loss
• Returns to suppliers

Result: Stock quantity decreases

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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
Transfer from location	Received stock from Store B

Note: For found items or discrepancies, use Stock Audit instead (see Common Mistakes below).

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
Samples given	Gave 2 units as free samples
Transfer to location	Sent stock to Store B
Returns to supplier	Sent 20 defective units back

Note: For damaged goods or losses discovered during counts, use Stock Audit instead (see Common Mistakes below).

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
Found extra stock	Discovered units not recorded
Initial setup	Recording opening inventory

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
3 units damaged during count	Stock Audit	Correction, not a sale

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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Stock Transfer

Purpose: Move stock between businesses/locations

When to Use:

• Multiple store locations
• Warehouse to store
• Between business units

What Happens:

• Decrease at source
• Increase at destination
• Tracked as transfer

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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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How Stock Levels Change

Example Transaction Flow

Starting Point:

Product: Coffee Beans
Current Stock: 50 units

Day 1: Stock In (Purchase)

Receive: 100 units
New Stock: 50 + 100 = 150 units

Day 2: Stock Out (Sale)

Sell: 30 units
New Stock: 150 - 30 = 120 units

Day 3: Stock Out (Sale)

Sell: 20 units
New Stock: 120 - 20 = 100 units

Day 4: Stock Audit (Adjustment)

Physical count: 98 units
System shows: 100 units
Adjust: -2 units (damage)
New Stock: 100 - 2 = 98 units

Viewing Stock History

Every change is tracked:

1. Go to History
2. Filter by product
3. See all transactions
4. View who made changes

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Understanding the Stock Equation

Starting Stock
+ Stock In (purchases, returns)
- Stock Out (sales, usage)
+/- Adjustments (audit)
= Current Stock

Real Example

January 1: Starting stock = 100 units

January 5: Stock In +50 units
January 10: Stock Out -30 units
January 15: Stock Out -20 units
January 20: Adjustment -5 (damaged)
January 25: Stock In +40 units

February 1: Current stock = ?

100 + 50 - 30 - 20 - 5 + 40 = 135 units

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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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Stock Flow Best Practices

Record Immediately

✅ Enter transactions promptly

• Record purchases when received
• Record sales when made
• Don’t backlog entries

Why: Accurate real-time stock levels

Be Accurate

✅ Double-check quantities

• Count physical stock
• Verify before submitting
• Review before saving

Why: Prevents inventory discrepancies

Use Notes

✅ Add context

• Why stock changed
• Reference numbers
• Special circumstances

Why: Audit trail and clarity

Regular Audits

✅ Physical counts

• Monthly or quarterly
• Compare to system
• Adjust as needed

Why: Catch errors early

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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Common Stock Scenarios

Scenario 1: Normal Sale

Customer buys 5 units
↓
Record Stock Out
↓
Stock decreases by 5
↓
Sale recorded in reports

Scenario 2: Customer Return

Customer returns 2 units
↓
Record Stock In (Return)
↓
Stock increases by 2
↓
Refund or store credit issued

Scenario 3: Damaged Goods

Find 3 damaged units
↓
Record Stock Audit (Negative)
↓
Stock decreases by 3
↓
Add note: "Damaged - water spill"

Scenario 4: Supplier Return

Return 10 defective units to supplier
↓
Record Stock Out (Return to Supplier)
↓
Stock decreases by 10
↓
Credit received from supplier

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Stock Alerts and Monitoring

Low Stock Alerts

Set minimum levels:

1. Go to Stock Alerts
2. Set minimum quantity per product
3. Get notified when stock runs low

High Stock Alerts

Avoid overstocking:

• Set maximum levels
• Monitor slow-moving items
• Adjust purchasing

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Stock Flow Reports

Stock Movement Report

See all changes:

• Date/time
• Type (in/out/adjustment)
• Quantity
• Staff who recorded

Current Stock Report

Snapshot of inventory:

• Current quantities
• Total value
• By category
• By location

Stock History

Timeline view:

• All transactions
• Trend over time
• Seasonal patterns

Integration with 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 Stock Issues

”Stock doesn’t match physical count”

Possible Causes:

• Missing transactions
• Wrong quantities entered
• Returns not recorded
• Theft/damage not logged

Solution:

1. Count physical stock
2. Review all transactions
3. Make adjustment
4. Investigate discrepancies

”Negative stock showing”

Cause:

• Selling more than recorded
• Data entry errors

Solution:

• Check recent sales
• Verify purchase records
• Adjust if needed

”Can’t record stock out”

Cause:

• No stock available
• Product out of stock

Solution:

• Check current stock
• Record stock in first
• Or check if wrong product

”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: What happens to stock when I delete a transaction? A: Stock is adjusted back. Deleting a sale adds stock back. Deleting a purchase removes stock.

Q: Can I have negative stock? A: Kelola can be configured to allow or prevent negative stock. Check your settings.

Q: How do I track stock across multiple locations? A: Use different businesses for each location, or use Stock Transfer between them.

Q: What’s the difference between Stock Out and Stock Audit? A: Stock Out is for sales/usage. Stock Audit is for corrections and adjustments.

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: Can I edit past stock transactions? A: Yes, with proper permissions. Editing changes stock levels automatically.

Q: How often should I do physical stock counts? 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.