Overissue Policy
Whether or not you allow overissues depends on your own policies and procedures. Some organizations determine that to maintain accurate inventory balances, negative balances cannot be permitted.
In an online, interactive system, inventory records are updated when inventory transactions are processed. Information is sometimes entered in batch when people are not able to enter transactions in real time. Without controls, inventory balances may temporarily be driven negative. However, after all the transactions are entered, inventory balances should not be less than zero.
If all of the following are in place and executed, inventory balances should be accurate:
• Procedures for recording inventory movement
• Procedures for data entry
• Regular cycle counts
• Good stockroom practices such as proper labeling and organization
• Controlled stockroom (that is, people cannot just walk in and take material)
If the Overissue field for the inventory status code is set to No, you may be unable to record a shipment transaction for inventory that is known to have shipped, because a work order receipt has yet to be processed. To prevent unnecessary delays in processing transactions, the Overissue field can be set to Yes. At the end of the day, a report can be run to check for negative balances. Regular cycle counts also help identify problems.
In some regulatory environments, it may be better to set the Overissue field to No. Here, data entry procedures should be developed to ensure the timely entry of inventory transactions. This may be particularly true when there are critical items controlled by lot or serial number.
Note: Overissues are not prevented when components are issued during inventory, work order, and repetitive backflush transactions. These transactions assume that component inventory must have been issued if a parent is received or an operation has been completed.