Master Data is the central database used to define entities so that there is standardization and uniformity across the organization. The two main Masters required for Inventory Management are Items and Warehouses

The Item Master is the most basic master data required to record transactions in an ERP system. It defines the Item being transacted, that is being Bought, Sold, or transferred. Therefore, creating the Item master correctly is critical to any successful implementation. Any mistake in Item Master will lead to mistaken entries in Transactions.

A warehouse is a Storage Location where Items are stored. In ERPNext Warehouse is a broader concept and is not just limited to Warehouse Buildings where Inventory is stored but can also include sub-locations like Shelves within the Warehouse Building. Defining the correct Warehouse Type will also lead to more detailed reports.

Lastly, we will also have a look at the Stock Settings to explain how the various settings work.