How debt repays itself
An inventory debt claim is a promise the ledger makes to itself: these units left before any stock was there to cost them, and the next stock that arrives for this product, in this warehouse, pays them back. You do not normally do anything to make that happen. This page explains what "the next stock that arrives" means, the order claims are repaid in, and the few kinds of stock that are never used.
Any arrival repays it, and it happens inside the arrival
A claim is repaid by whatever puts owned stock on the shelf for the same product and warehouse:
- a purchase order receipt
- a warehouse transfer received into that warehouse
- a positive inventory adjustment
- a customer return that is restocked
- a finalised stock take that counts units in — including the draft one you can raise from the debt report (see Clear debt no delivery will repay)
Repayment is part of the arrival itself, not a step that runs afterwards. The moment the receipt is recorded, the debt for that product and warehouse is repaid from it, and only what is left over becomes available stock. Nothing else — an allocation, a backorder release, another shipment — can take those units in between.
That ordering is deliberate. A backorder is a promise about the future; a debt claim is a shortage that has already happened, and the goods are already with the customer. The shortage is settled first, then the queue of promises is served from the remainder.
It runs whether or not backorders release automatically
The setting that decides whether backorders are released by hand or automatically is about promises, not deficits. Debt repays itself either way. If you release backorders by hand and pick only some orders to release, the debt for that product and warehouse is still repaid first, and the orders you picked receive what remains. You cannot strand a claim by leaving orders unticked. A product with no debt behaves exactly as before: the orders you pick get the whole receipt.
Oldest first, within one product and one warehouse
Claims are grouped by product and warehouse, and within that group they are repaid strictly in the order they were incurred. The arriving units go to the oldest claim until it is fully repaid, then to the next, until the stock or the claims run out.
Two things follow from that:
- A receipt into one warehouse never touches another warehouse's claims. Debt is owed where the shortage happened. Stock landing in a second warehouse settles that warehouse's claims only, even for the same product. The same goes for a return: a return restocked into a different warehouse does not repay the originating warehouse's debt.
- You cannot repay a newer claim ahead of an older one. When you use Settle from Stock on the debt report and tick a newer claim, everything older in the same product and warehouse is repaid ahead of it. The confirmation says so before you commit, and the result counts the older claims it repaid too. See settle a claim from stock you've received.
The claim keeps the date and cost it was incurred at; only the repayment carries the arrival's date and cost.
Part repayment is normal
A claim does not need one delivery to repay it. If three units are owed and two
arrive, two are repaid and the claim stays Outstanding with one still owed — the
report's Outstanding column reads 1 / 3. The next arrival repays the rest.
The report shows this plainly. A claim for four units that a receipt has since half
repaid reads Outstanding 2 / 4, and its Clearing column shows the amount
relieved so far beneath what remains. Each part of a repayment carries its own date,
its own actual cost and its own variance against the estimate, and the last part
takes whatever clearing money is left so the account returns to exactly zero. The
claim is marked Settled only when the final unit lands.
Products sold by weight or in fractional quantities repay to exactly zero as well. A claim for one unit repaid from three part-unit receipts closes completely rather than leaving a sliver owed that no receipt could ever clear.
Which stock a repayment picks
Two things about that choice are worth knowing.
Repayment looks only at what a delivery has left. It takes from any arrival that still has unused quantity on it, and it does not ask whether an order was counting on that quantity. So a repayment can consume stock an outstanding order had its eye on, and that order goes back to waiting. Nothing is lost — the units are owed to somebody either way — but if a particular order matters more than closing a claim, ship it before the next delivery lands.
It works through arrivals in the order they were entered, not the order they arrived. Those are usually the same. They part company when a receipt is backdated: a delivery entered today but dated last week is still the newest arrival as far as repayment is concerned, so an older-dated one recorded before it is used first. If the cost difference between two deliveries matters to you, check which one the claim actually drew on — the settlement entry names it.
Stock that never repays debt
Consigned stock
Stock a supplier still owns is not yours to spend, so a consignment receipt repays nothing. The claim waits for owned stock. Repaying from consigned units would quietly convert the supplier's goods into yours and double-count what you owe the supplier. The rule cuts both ways: a product and warehouse holding any consigned stock cannot ship into debt in the first place, even when owned stock sits beside it.
A return that is not restocked
A customer return repays debt only if the units go back on the shelf. A return that is discarded, scrapped or written off puts nothing on the shelf, so the claim stays open. When a return does restock and repays a claim, the units and the money net to zero: the return put the goods back and the repayment takes them out again.
Stock that arrived before a channel shipment was recorded
For debt a sales channel created — an order the channel shipped before SKU.io could match stock to it — the claim is measured against what had actually arrived by the time the channel shipped. Stock that landed after that moment is not treated as having covered the shipment. It repays the claim instead, on its own date, exactly like any other arrival. That keeps the history honest: the claim shows a shortage on the day the goods went out, and the repayment shows the day the stock came in.
Two related rules: units SKU.io had already fulfilled on the line are never owed a second time, and a channel shipment dated before your inventory start date is never recorded as debt at all, because your opening count already reflects those goods being gone.
Counts and adjustments can only ever repay debt
A stock take or an inventory adjustment records what is physically on the shelf. A shelf cannot hold minus two, so these can never create debt — an adjustment that would take a count below zero is refused before it is saved. They can only add stock, and stock they add repays claims like any other arrival.
That has one consequence worth knowing before you finalise a count. If five units are owed and a count finds three on the shelf, the count is treated as an increase of eight, not three: five repay the claims, and three go on the shelf as new stock. The count is never read as "three more than nothing", because the debt had already taken the owed units out.
Nothing is repaid twice
A claim that has been repaid is never repaid again, and a unit of arriving stock is never spent on two claims.
What you see in the stock history
Debt keeps its own line in a product's movement history. The original debt line stays on the date the goods went out, at the estimated cost, and it is never re-dated or re-pointed at the stock that eventually repaid it. When a claim is repaid, two lines appear on the arrival date: one that retires the debt, and one that consumes the real stock at its actual cost. Read together, the history shows exactly how much was owed on any given day.
A debt line has no stock layer behind it, so it is never counted as on-hand value. Inventory valuation reports it separately — as units owed and as the clearing balance — rather than folding it into stock on hand. See debt on your reports.