SKU
The code you give a specific sellable thing so it can be counted, priced, and tracked. In practice a SKU is an identifier you choose and own — it does not have to match the manufacturer's code or the barcode printed on the pack.
Why it matters in practice. A product record with no tax treatment, no unit, and no warehouse behaves differently at the counter from a complete one, and the difference shows up as a mis-bill rather than as a warning. Catalog hygiene is real work.
Often confused with Variant, Stock on hand, POS.
Variant
A specific sellable version of a product — a size, a colour, a pack quantity, a unit of measure — that carries its own stock position and its own price rather than a free-text note on the parent record.
Why it matters in practice. Variants are where inventory models usually get complicated. If a 500 ml bottle and a 1 litre bottle are one record with a typed-in size, the stock cannot be counted accurately and the price cannot be enforced at the counter.
Often confused with SKU, Stock on hand, Stock adjustment.
Stock on hand
The quantity of a SKU currently held at a location, produced as the result of every sale that deducted it and every receipt that added to it — not by somebody remembering to update a sheet at the end of the day.
Why it matters in practice. Stock levels stop being a claim and start being the consequence of what happened at the counter. That is also what makes a discrepancy diagnosable: the drift traces back to a specific set of movements made outside the counter.
Often confused with Stock adjustment, Shrinkage, Multi-location stock.
Reorder point
The stock level at which you should raise a purchase, normally expressed as the quantity expected to sell during the supplier's lead time plus your safety stock. It is a decision rule you set, not a fact the system discovers.
Why it matters in practice. It turns reordering from last season's instinct into a consequence of actual consumption. The lead time and demand rate behind it are your own assumptions, and they are the part worth reviewing — a reorder point built on stale inputs is just a guess with a formula around it.
Often confused with Safety stock, Reorder quantity, Stock on hand.
Safety stock
Extra stock held beyond expected demand during lead time, to absorb the ordinary surprises — a slower delivery, a demand spike, a miscount, a shift in what customers ask for.
Why it matters in practice. It is a trade rather than a free good: more safety stock means less risk of running out and more cash sitting on a shelf. Writing the number down explicitly is what turns that trade into a decision instead of a habit.
Often confused with Reorder point, Reorder quantity, Stock on hand.
Reorder quantity
How much to order when you hit the reorder point — normally enough to bring the position back up to a target level, adjusted for what is already on order with the supplier.
Why it matters in practice. Ordering to the reorder point alone is a common and expensive mistake: the shelf fills, the truck is late, the shelf empties again, and the cycle repeats. The quantity is the part that stops it.
Often confused with Reorder point, Safety stock, GRN.
Shrinkage
The gap between the stock the system says you should hold and the stock you actually hold — damage, expiry, theft, sampling, miscounts, and movement nobody recorded. It is a measurement of a difference, not a record in itself.
Why it matters in practice. Naming it separately from ordinary adjustments keeps the question honest. If every loss is written off as an adjustment the total is identical, but nobody ever asks why it keeps happening at that particular shelf or in that particular shift.
Often confused with Stock adjustment, Stock on hand, Stock transfer.
Stock adjustment
A recorded, reasoned change to the stock on hand for a SKU at a location, with a stated reason. It is how a physical reality that came from neither a sale nor a purchase gets onto the record at all.
Why it matters in practice. A count is only as good as the rule for what should have moved. Agreeing how damaged goods, samples, and stock taken for another branch are recorded before go-live is what keeps later counts meaningful instead of mysterious.
Often confused with Shrinkage, GRN, Stock on hand.
GRN (goods received note)
The record that goods arrived: what, how much, from whom, in what condition, and against which purchase. Receiving it brings the stock on hand back in line with reality.
Why it matters in practice. A purchase raised and never received is one of the commonest reasons a stock count disagrees with the system. The GRN is the event that closes that gap, and a missing one is a specific, findable thing rather than general drift.
Often confused with Stock adjustment, Reorder quantity, Stock transfer.
Multi-location stock
Stock held per warehouse, store, or branch as separate balances, with a consolidated view that reads from the same records rather than from a monthly export assembled by hand.
Why it matters in practice. Where a group's operations are genuinely separate, keeping the balances apart is what stops one location's trading from silently correcting another's mistakes — while the group figure and the shop figure remain two views of the same truth.
Often confused with Stock on hand, Stock transfer, Permission scope.
POS (point of sale)
The counter system that records a sale as an event: items and quantities, the business's tax treatment applied, payment captured as a method, a receipt produced from the same entry, and stock deducted when the sale completes.
Why it matters in practice. What separates a stock-aware counter from a till is that the sale, the stock it consumed, and the money it produced are required to be the same event. Without that requirement, nothing after closing can be reconciled — only guessed at.
Often confused with Invoice, Stock on hand, Day-end close.
Stock transfer
A recorded movement of stock from one location to another, so the sending location's balance falls and the receiving location's rises as a consequence of one document rather than of two independent corrections.
Why it matters in practice. Transfers are among the movements that most often happen outside the counter, which is exactly why they are worth modelling. Two ad-hoc adjustments across two locations are indistinguishable, afterwards, from a missing item.
Often confused with Stock adjustment, Multi-location stock, GRN.