Transfers Between Warehouses: Tracking Stock in Transit and Avoiding Double Counting

When a business has more than one warehouse or branch, transfers become a daily routine: Riyadh supplies Jeddah, the central warehouse feeds the stores, and surplus in one branch covers a shortage in another. On paper the process looks simple, yet it is one of the places where stock accuracy leaks away most often. This article explains why transfers go wrong and how to organise them so your figures stay correct at every moment.

Why transfers so often go wrong

The core issue is that a transfer passes through three different moments: when goods leave the sending warehouse, the time they spend on the road, and when they enter the receiving warehouse. Recording all three as a single entry produces familiar errors:

• Double counting: stock is added to the receiving warehouse before it is deducted from the sender, so it appears in two places.
• Disappearing stock: it is deducted from the sender but never added to the receiver because nobody recorded the receipt, so it vanishes from the figures while it actually sits in a truck or on a dock.
• Silent differences: less arrives than was sent, and the figure is adjusted without anyone knowing where the difference went.

Two steps, not one: dispatch, then receipt

The established practice in inventory management is to record a transfer in two separate steps:

1. Dispatch: the sending warehouse creates the transfer document with items and quantities. When the goods actually leave, the dispatch is posted: quantities are deducted from the sender and move to "in transit".
2. Receipt: when the goods arrive, the receiving warehouse counts them and records the quantities actually received, which move from "in transit" into its stock.

With this separation, quantities never appear in two places and never drop out of the books. Each step is recorded with who did it and when, so everyone knows where the goods stopped if they are late.

Stock in transit: the warehouse nobody sees

It helps to treat dispatched goods as sitting in a virtual warehouse called "in transit". Nothing is issued from it or received into it directly, but it answers important questions:

• What is the value of goods that have left our warehouses but not yet arrived?
• Which transfers are later than usual?
• Is there enough stock on its way to cover a shortage at the receiving branch before we place a new purchase?

Review the list of open transfers regularly. A transfer that stays in transit longer than usual needs follow-up: perhaps the goods arrived and the receipt was never recorded, or perhaps something happened that deserves investigation.

This matters most in high-demand seasons such as Ramadan, Eid and the start of the school year, when branches move stock between them more often to cover shortages quickly. Under that pressure it is tempting to record a transfer in one go to save time — and those are exactly the periods when you need accurate figures more than ever.

Shortages and damage on receipt

Not every shipment arrives complete. When a warehouse receives less than was sent, it should not simply record the lower figure as if nothing happened. The sound approach:

• The receiver records the quantity that actually arrived, not the quantity written on the document.
• The transfer closes as "received with shortage", and the difference is shown clearly by item and quantity.
• An authorised person reviews the difference and decides the cause — a picking error, damage in transit, or loss — and it is settled with a documented adjustment and a clear reason.

Damage works the same way: goods that arrive damaged are received and then handled with a separate adjustment stating the reason, so their effect stays visible in the history instead of disappearing into the receipt figure.

Permissions and documents

A transfer is a real stock movement and deserves the same control as receiving and issuing:

• Who dispatches and who receives: ideally the dispatch is done by the sending warehouse's team and the receipt by the receiving warehouse's team, each within the warehouses assigned to them.
• Who approves differences: a gap between what was sent and what arrived is settled only by a supervisor's or inventory manager's decision.
• The document: every transfer has a unique number, is printed or attached to the shipment, and shows the date, items, quantities and batch numbers where relevant.
• The history: every change or cancellation is kept in an audit log, and a posted transfer is never deleted; if needed, it is reversed with an opposite movement.

Transfer checklist

• Dispatch and receipt are always two separate steps.
• Dispatched goods show as "in transit" until received.
• The receiver records what actually arrived, after counting.
• Shortages close with a clear status and their cause is reviewed.
• Each user works only within their own warehouses.
• Late transfers are reviewed regularly.

Transfers in MIRSAD, and the takeaway

In MIRSAD, a transfer is recorded in two steps: a dispatch that deducts the quantity and moves it to "in transit", and a receipt that adds what actually arrived, with a "received with shortage" status when there is a difference. Batches are allocated earliest-expiry-first on dispatch, and permissions follow the warehouses assigned to each user. You can contact us to learn more.

Good transfers do not rely on good intentions; they rely on recording that separates the three moments and makes every difference visible. Separate dispatch from receipt, follow what is in transit and settle shortages with a documented decision, and your branches' figures will match what is on their shelves.