Inventory transfer (or warehouse transfer, or MM document) is an integral part of effective inventory management. What is it exactly and how can you use it to make your business more efficient? We answer below.
What is Inventory Transfer?
An inventory transfer, or warehouse transfer, or MM document (Material Movement), confirms the transfer of goods between a company’s warehouses. It helps control the process of transporting products:
- From the moment they are moved,
- Until they arrive at the destination warehouse.
The MM document is created for reasons such as:
- sale of goods,
- the need to move goods, e.g. due to increased demand for them at a specific location,
- the need to optimize storage space.
Inventory Transfer – What should the MM document include?
The MM document allows for precise monitoring of the relocation of goods to destination warehouses. A standard form should include:
| Disposition | e.g., information about the transfer to the target storage area |
| Location details | inventory numbers of warehouses from which the goods are released and to which they are directed |
| Date of issuing the order | e.g. 23 October 2024 |
| MM warehouse number | sequential number of the document |
| Material index number | i.e. the product identifier (ID) |
| The name of the item or material | |
| Quantity | Usually includes data on the released and received quantity, along with the specific unit of measure. |
| Unit price and total value | Provided in the local currency. |
| Signatures | The person issuing the order and those responsible for dispatching and receiving the goods. For quantity-value accounting, the signature of the evaluator is also required. |
When is an MM document (inventory transfer) issued?
The warehouse transfer is a crucial document that helps control:
- The movement of goods or materials, what facilitates logistics management,
- The process of storing goods.
The MM document does not have to be issued for every transfer of goods. A consolidated report can be created at the end of the accounting period, e.g., at the end of the month. This is possible if such a method is specified in the company’s accounting policy.
When issuing a warehouse transfer, it is important to remember that:
- the date of acceptance of the delivery is the date of its first acceptance,
- subsequent transfers don’t affect the due date, regardless of the destination warehouse location.
Effects of issuing an MM document (warehouse transfer)
Warehouse transfer allows you to control the logistics process, but it does not involve the purchase or sale of goods. This means that its issuance does not generate a tax obligation.
What other documents confirm the inventory transfer?
In addition to the MM document, other warehouse documents help control the flow of goods. You can classify them into two groups:
- Inbound,
- Outbound.
Although the MM document is common, some businesses choose to apply a division into:
- Warehouse release document – a document confirming the dispatch of goods from the warehouse. It is used to generate a warehouse receipt document.
- Warehouse receipt document – a document confirming receipt of goods into the warehouse. It is used for logging goods into the destination warehouse.
Inventory Transfer – Inbound documents
Inbound warehouse documents can be divided into two main groups:
| External receipt of goods (ER) | Internal receipt of goods (IR) |
| These are documents generated by the warehouse employee based on the delivery confirmation. They are issued in the case of purchasing goods or receiving them free of charge. ER documents are especially important in situations where the delivery is not invoiced. A warehouse transfer document of this type should include: – date of issuing and receiving the goods, – number of a document, – data and signatures of the supplier and the person issuing the ER document, – details of the goods to be sent, such as their designation, unit price and quantity. | They are used during the transfer of goods between warehouses within one company, without external contractors. IR document is more detailed than an MM document, which is used for general material management. The elements of the IR include: – date of issue and receipt of goods, – number of a document, – details of the issuer and signatures, – details of the goods. |
Within the inbound documents, it is also important to mention the internal return. This document is issued when picked goods may be returned to the warehouse. The most common example is, for instance, mistakenly picking the wrong goods or an excess withdrawal of materials. It is important to specify the reasons for the return in the internal return document.
Inventory Transfer – Outbound documents
Outbound documents are classified into the following categories:
| External release of goods | Internal release of goods |
| This document confirms the release of goods or materials from the warehouse. It is usually connected with their sale or transfer. An external release note is a specific confirmation of the release of goods to an external party. For example, a customer. | This document confirms the release of materials from the warehouse for the internal needs of the company. For example, for the transfer of office supplies. Internal release notes are issued by the unit responsible for the release of those goods. |
Inventory Transfer – Summary
Inventory Transfer (MM document) is essential for effective inventory management. It ensures transparency in the flow of goods within the enterprise. This allows for more efficient company management.
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FAQ – Questions and Answers About Inventory Transfer
What is a warehouse transfer?
A warehouse transfer is the process of moving goods from one location in the warehouse to another. In ERP systems such as SAP, the MM (Material Management) document is used to track these operations.
What are the main reasons for a warehouse transfer?
Warehouse transfers can be caused by various factors, such as:
Optimization of warehouse space.
Changes in the location of products.
Preparation for inventory.
Changes in the organization of warehouse work.
What documents are required to perform a warehouse transfer?
To perform a warehouse transfer, the following documents are usually needed:
Documents confirming the condition of the goods.
Information about locations (both departure and destination).
MM document number that tracks the operation.
What tools can help in the warehouse transfer process?
Useful tools include:
Warehouse management systems (WMS)
Inventory software
Transport equipment (forklifts, site trolleys)
Mobile applications for barcode scanning
Does a warehouse transfer affect stock levels?
Yes, each warehouse transfer affects inventory levels. It changes the quantity of goods in both the source and destination locations. This should be automatically updated in the system.
What errors can occur during a warehouse transfer?
Common errors include:
Entering incorrect location data
Incorrect selection of goods
Failing to register the operation in the system, leading to inconsistent inventory levels
What are the benefits of using MM documents for warehouse transfers?
Benefits include:
Increased accuracy of inventory data
Easier tracking of the movement of goods
Better organization and management of warehouse space
Can a warehouse transfer be cancelled or edited?
Yes, in most ERP systems, it is possible to cancel or edit a transfer. However, it requires relevant permissions and may involve additional administrative steps.
Where can I find more information about warehouse transfers?
More information can be found in the ERP system documentation, training materials, or specialized publications about inventory management and logistics.