An inventory transfer moves stock you already own from one of your locations to another, and it works in three steps: the store that needs the stock requests it, the store that has it sends it, and the receiving store confirms what arrived. The sending store's count drops when the stock leaves and the receiving store's count rises when someone receives it, which means the whole thing depends on that last step being done. A transfer that ships and is never received is how a store ends up with twelve boxes on the shelf and a count of zero. This guide walks through the workflow with a worked example, explains what a transfer does and does not do to your costs, covers when to transfer instead of ordering, lists the four ways transfers go wrong, and shows how Rundoo handles each step.
What counts as a transfer
A transfer is any movement of stock between two places that keep separate counts. For most supply stores that means one of three things:
- Store to store. The downtown hardware store sends deck screws to the branch on the highway.
- Warehouse or main store to branch. One location takes the vendor truck and feeds the others.
- Store to yard. A lumberyard or landscape yard that tracks its yard as its own location moves stock out as it is needed.
It is worth separating a transfer from two things it gets confused with. A sale to your other store is not a transfer, because it would record revenue, margin, and possibly tax on stock that never left the company. And moving an item from the back room to the sales floor inside one store is not a transfer either, since it is one location with one count. That second case comes up during an inventory count, where the job is to add both spots together, and we cover it below.
The three steps, with a worked example
Take a hardware company with a main store and a branch. On a Monday the branch has 6 boxes of 3-inch deck screws and sells about 10 a week, while the main store has 60 and sells about 15.
| Step | Who does it | Main store on hand | Branch on hand | In transit |
|---|---|---|---|---|
| Before | 60 | 6 | 0 | |
| 1. Request 24 boxes | Branch | 60 | 6 | 0 |
| 2. Pick and send 24 | Main store | 36 | 6 | 24 |
| 3. Receive 24 | Branch | 36 | 30 | 0 |
Step 1, the request. The branch asks for 24 boxes. Nothing moves and no count changes. The request exists so the main store knows what to pull and can say no if it needs the stock itself.
Step 2, the send. Someone at the main store pulls the boxes from a pick list, loads them, and marks the transfer sent. The main store's count drops to 36 at that moment, because the boxes are no longer there to sell. The 24 boxes are now in transit: owned by the company and in neither store's sellable count.
Step 3, the receive. The branch checks the delivery against the transfer and marks it received, and its count rises to 30. The company owned 66 boxes before and owns 66 after.
Small companies often collapse the steps. If the owner is driving the stock over personally, there is nobody to ask, so the transfer is entered as sent, or even as already received. That is fine, as long as the person doing it knows which shortcut they took.
When the truck arrives short
The receive step is where the two counts are made to agree with the shelf, so it has to record what arrived and not what was supposed to. Suppose the main store marked 24 boxes sent and only 22 came off the truck. The branch should receive 22. The other 2 stay open on the transfer, which is the right outcome, because an open line is a question somebody has to answer: were they left on the dock, or did the main store pick 22 and mark 24?
Two details make this easier to run. A pick list for the sending store should show product, quantity, and where to find it, with no costs, so it can be handed to anyone on the floor. And the quantity picked should be recorded separately from the quantity received, because when they differ, you want to know which end to ask.
What a transfer does to your costs
Nothing, in total. A transfer moves the value of the stock from one location's inventory to the other's at cost, and no sale, margin, or sales tax is recorded. If those 24 boxes cost $9.00 each, $216 of inventory leaves the main store's books and arrives on the branch's.
The details that vary by system are which cost is used, since average cost and standard cost can differ, and whether freight between your stores is added on. Most single-owner companies leave freight out, and our guide to landed cost explains when it is worth including. If your locations are separate legal entities, a movement between them may be a sale for tax and accounting purposes, which is a question for your accountant before your first transfer and not after your fiftieth.
When to transfer instead of ordering
Transfers earn their keep in three situations.
- One store is long and the other is short. Compare each store's weeks of supply, which is on hand divided by weekly sales. In the example, the branch had less than one week and the main store had four, so moving stock beat ordering more.
- A special order needs stock the other store has. The customer at the counter gets it tomorrow instead of in ten days.
- Dead stock in one store still sells in the other. A product that stopped moving downtown may sell fine at the branch, and moving it is cheaper than marking it down, as our guide to finding and clearing dead stock covers.
The fourth situation is the one to plan on purpose: a hub store that buys for everyone. When one location receives the vendor truck to hit a freight minimum or a better price break, transfers are how the branches get their share, and each branch's reorder point should trigger a transfer request instead of a purchase order.
Four ways transfers go wrong
The transfer is sent and never received. This is the big one. The branch puts the screws on the shelf and sells them, its count goes negative, and the main store's count is right while the company's total is wrong. The fix is a habit: nobody shelves a transfer until it is received, and someone looks at the list of open transfers every week.
The stock is received at the wrong location. A three-store company sends to store two and the paperwork says store three. Both stores are now wrong in opposite directions.
The stock rides over with no transfer at all. A manager throws four cases in the truck on the way home. Both counts are wrong until the next count finds it, and nobody will remember why.
A count runs while a transfer is in transit. If the main store counts on the day 24 boxes are on the truck, the count is right for the main store, but a careless counter at the branch who sees the delivery in the back room and counts it before it is received will double it. Receive first, then count, and see our guide to cycle counting for the cutoff rules.
One item in two places inside one store
Buyers often ask a related question: what if the same item lives on the sales floor and in the back room, or on the shelf and in the yard? Inside one location that is one count, so the system needs a way to add the two spots together during a count without anyone doing arithmetic on a clipboard. The usual approach is a count that accepts a second entry for the same product and adds it to the first. If the two spots are far enough apart that different people sell from them, such as a store and a yard across the road, treat them as two locations and use transfers.
How Rundoo handles transfers
Rundoo keeps inventory, counts, and dashboards per location in one catalog, and a transfer moves stock between any two of your locations. You pick the store sending and the store receiving, add products by SKU, name, or vendor SKU, and each line shows the on hand at both stores so you can see what the move does before you make it. For stores with Dooey, the AI built into Rundoo, a Generate transfer button proposes quantities from each location's sales velocity and on hand, and you review the numbers before sending.
The three steps are three choices on one Submit menu. Request puts the transfer in front of the sending store to approve and pick, Send records the stock as having left, and Receive books a transfer as already delivered when the same person carried it over. Which one you use is your call on each transfer, and no setting forces an approval step. Staff with the transfers permission can be notified by text, email, or in the app when a transfer is requested.
The sending store can print the transfer as a pick list, which shows each product, the quantity, and where to find it, and leaves off costs. Picked and received quantities are tracked in separate columns, so a line picked short is visible as such. The receiving store confirms each line as it lands, the destination's on hand rises the moment it is confirmed, and anything that did not arrive stays outstanding on the transfer until it does. Transfers are valued at average cost. Each transfer carries the location's own code in its number, which makes the paperwork easy to sort, and managing transfers is its own permission, described in our guide to POS employee logins, PINs, and permissions.
For the one-item-two-places question, counting in the Staff app offers Add to count beside Set count, so the clerk counts the shelf, walks to the storeroom, counts again, and Rundoo adds the two. Counts are per location, and a count changes your on hand only when it is completed.
What to ask any vendor about transfers
- Show me a transfer from request to receive, with a short shipment in the middle.
- Where do I see every transfer that has been sent and not received?
- Does the pick list hide cost?
- Can the system suggest a transfer from what each store sells and holds?
- What cost does a transfer use, and does it touch my sales or tax reports?
- Who is allowed to request, send, and receive, and can I set that per person?
- How do I count an item that sits in two spots in one store?
If you are opening a second location, these seven questions belong in the same conversation as shared customers and shared pricing, and our guide to what a store means when it says it needs an ERP covers the rest of that list.
