Understanding Stock Allocation

Introduction

Before a Goods Out order can be dispatched, the specific stock items in your warehouse need to be assigned to it. This process is called allocation. This guide explains how allocation works, the different states stock can be in, and how the system decides which items to pick first.

What Is Allocation?

When you create a Goods Out order, you specify which products and quantities the customer needs. Allocation is the step where you match those requirements to actual physical items sitting in your warehouse.

For example, if a customer orders 50 units of Product A, you need to tell the system which specific items (boxes, pallets, etc.) from your shelves will fulfil that order.

Reserved vs Dispatched

When you allocate an item to an order, it can be in one of two states:

Reserved

The item is earmarked for this order but stock has not yet been deducted from your inventory.
Think of it as "set aside" — the item is still technically in stock but spoken for.
Useful when you want to plan picking ahead of time without immediately affecting stock levels.
Shown with a yellow indicator on the order.

Dispatched

The stock has been deducted from inventory and a record is made in the stock ledger.
This means the item is considered shipped or ready to ship.
Shown with a green indicator on the order.

You can choose to dispatch items immediately when allocating, or reserve them first and dispatch later in bulk.

FIFO — First In, First Out

The system follows a First In, First Out (FIFO) approach when suggesting or automatically allocating stock. This means:

Stock that was received earliest is used first.
Items are ordered by batch reference and then by item number, so older stock is always prioritised.
This helps ensure stock rotation and reduces the risk of items sitting in the warehouse too long.

FIFO is applied automatically when using the Auto-Allocate feature, and items are presented in FIFO order when allocating manually.

Progress Tracking

Each product line on a Goods Out order shows a progress bar so you can see at a glance how allocation is going:

Green portion — Quantity dispatched (stock deducted).
Yellow portion — Quantity reserved (set aside but not yet dispatched).
Remaining — The gap between what has been allocated and what the customer ordered.

The line also shows a text summary, e.g., "30 dispatched, 10 reserved, 10 remaining".

Stock Restrictions

Sometimes a customer may require stock from a specific inbound batch — for example, they need items from a particular production run or delivery. In these cases, you can add restrictions to a product line on the Goods Out order.

When a line has restrictions:

The system will prioritise the restricted stock and mark it as Preferred during allocation.
Until the restricted quantity is fulfilled, you won't be able to allocate from other unrestricted stock.
This ensures the customer receives exactly the batch they requested.

Restrictions are optional and most orders won't need them. For a full guide on setting up and managing restrictions, see Stock Restrictions.

Key Things to Know

Allocating stock does not change the order status on its own — the order moves to In Progress once the first allocation is made.
You can mix reserved and dispatched allocations on the same order.
Removing a dispatched allocation restores the stock back to inventory and records a reversal in the stock ledger.
Removing a reserved allocation has no impact on stock levels since it was never deducted.
An order can be completed even if not all lines are fully allocated — any shortfalls are recorded.

Next Steps

Now that you understand how allocation works, see Allocating Stock to a Goods Out Order for a step-by-step guide on picking items, or Using Auto-Allocate to let the system do it for you.