Inventory On Hand


Inventory On Hand refers to the total number of items or products that a business has in stock at a given time. This includes items available for sale or use, as well as those that have been allocated for specific orders but not yet shipped.

Detailed Explanation

Keeping track of Inventory On Hand is essential for businesses to ensure they can meet customer demands, plan for future purchases, and manage storage space efficiently. It provides a snapshot of the company’s current stock levels, helping to prevent stockouts (where there’s no stock available to meet demand) or overstocking (where too much stock is held, leading to increased holding costs and potential wastage).

Several factors can influence Inventory On Hand:

  1. Purchases: Buying new stock increases the Inventory On Hand.
  2. Sales: Selling items reduces the Inventory On Hand.
  3. Returns: Items returned by customers can increase the Inventory On Hand.
  4. Damages or Losses: Damaged goods or items that are lost or stolen reduce the Inventory On Hand.


Modern inventory management systems often provide real-time tracking of Inventory On Hand, ensuring businesses have accurate and up-to-date information.


A clothing store might have 100 units of a particular shirt as Inventory On Hand at the beginning of the month. If they sell 60 units and receive a new shipment of 40 units, they’ll have 80 units on hand at the end of the month.

A hardware store might start with 50 units of a specific tool. If 5 units are damaged and 10 are sold, the Inventory On Hand becomes 35 units.

Related Terms and Concepts:

Frequently asked questions about Inventory on Hand

Why is it important to track Inventory On Hand? Tracking this metric ensures businesses can meet customer demands, plan for future stock needs, and manage storage and holding costs effectively.

How often should Inventory On Hand be checked or audited? While modern systems provide real-time tracking, physical audits or stock counts are still recommended periodically to ensure accuracy and account for discrepancies.

Does Inventory On Hand include items that are allocated but not shipped? Yes, it includes all items currently in stock, even if they’re reserved for specific orders.

How do businesses handle discrepancies in Inventory On Hand? Discrepancies can arise from errors in recording, damages, theft, or other issues. It’s essential to investigate discrepancies, adjust records accordingly, and implement measures to prevent future issues.

Can Inventory On Hand be negative? In ideal scenarios, no. However, discrepancies, system errors, or issues like unrecorded sales can sometimes result in negative figures. Such situations should be addressed promptly.


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