Branch Material Transfer via Sales & Purchase Invoice in ERPNext
In some cases, there are statutory requirements where taxes must be applied on each transfer of material. Handling this is easier in a transaction like a Sales Invoice than in a Stock Entry. The steps below show how to transfer material from one branch to another using a Sales Invoice and a Purchase Invoice.
Step 1: Set company defaults
In the Company master, add a default Unrealized Profit and Loss account and a default In-Transit warehouse.
Step 2: Create internal customer and supplier
Create an Internal Customer and an Internal Supplier, and allow them to transact with the same company. Also link the appropriate address and GST details to each party.
Step 3: Create the Sales Invoice (delivering items from the source)
- Select the internal customer you created in the previous step.
- Check Update Stock.
- Add the items to be transferred, with the Source Warehouse and the Target Warehouse set as the In-Transit warehouse.
- Save and Submit.
On submission, this posts to both the Stock Ledger and the Accounting Ledger moving the stock into the in-transit warehouse and recording the corresponding accounting entries.
Step 4: Create the Purchase Invoice (receiving items at the destination)
Use the Create Internal Purchase Invoice button on the Sales Invoice to generate the Purchase Invoice. Select the Accepted Warehouse (the warehouse where stock has been received), then Save and Submit.
This again posts to the Stock Ledger and Accounting Ledger moving the stock out of the in-transit warehouse into the destination warehouse and completing the transfer.
NOTE
Applying GST automatically on these invoices depends on your GST configuration. Make sure you have the proper tax templates set up, and the appropriate addresses and GST details linked to the internal parties.
TIP
The In-Transit warehouse is what makes this two-step flow work cleanly: the Sales Invoice moves stock into it and the Purchase Invoice moves stock out of it, so material in transit between branches is always visible and never unaccounted for.
Related Topics
- Sales Invoice
- Purchase Invoice
- Internal Customer
- Internal Supplier
- Warehouse
- Company
SUMMARY
To transfer material between branches while applying taxes on each transfer, use a Sales Invoice and a Purchase Invoice instead of a Stock Entry. First set a default Unrealized Profit and Loss account and an In-Transit warehouse in the Company master, and create an internal customer and supplier (with addresses and GST details). Then raise a Sales Invoice to the internal customer with Update Stock checked, source warehouse, and the In-Transit warehouse as target, and submit. Finally, use Create Internal Purchase Invoice from that Sales Invoice, select the accepted warehouse, and submit. Both post to the stock and accounting ledgers; GST depends on your tax configuration.
