Inventory management is an area where a few small decisions can have a big impact on efficiency, cash flow, and customer satisfaction.
One point of confusion we see with clients is the difference between stocked and non-stocked items, and how to decide which approach makes the most sense for a particular product.
The term non-stocked item can mean a couple of different things depending on how it’s used.
In one sense, it can describe an inventory item that exists in your system but isn’t physically kept on the shelf. In another, it refers to an item that isn’t tracked as inventory at all: it’s expensed upon receipt, with no valuation on the balance sheet and no quantity recorded in the warehouse.
At SVA Consulting, we typically think of non-stocked in that second sense. These items don’t carry a balance-sheet value and aren’t managed through inventory counts. Think of office supplies, shipping materials, or even coffee for the break room. No one’s walking around counting how many reams of printer paper are left before ordering more. When you run out, you buy more. Simple.
By contrast, stocked items are tracked for quantity and value. You know how many are on hand, where they’re located, and what they’re worth. They appear as assets on your balance sheet, which means they need to be managed deliberately, especially when it comes to purchasing and replenishment.
Not every item worth tracking needs to be purchased frequently. Some high-value or custom products, even if ordered infrequently, should still be considered stock items. That’s because the cost or importance of those materials justifies the added visibility of knowing where they are, how they’re used, and when replacements might be needed.
Stocked items also give you the ability to plan ahead. You can set reorder points, maintain safety stock, and use replenishment tools within your ERP system to avoid last-minute scrambles. This kind of control helps reduce waste and improve order accuracy.
If the cost of tracking an item outweighs the value of the item itself, it’s probably a non-stock item.
Manufacturers often use this logic for low-value, high-volume materials like nuts, bolts, or screws. Tracking every handful that leaves the bin isn’t worth the administrative effort. In those cases, the company buys in bulk, expenses the purchase right away, and simply restocks when supplies run low.
Non-stock items typically fall into categories such as:
These items keep operations running smoothly, but they don’t need detailed inventory tracking.
Even within stocked items, the real question is: how much should you actually keep on hand?
Just because you track an item doesn’t mean you need to store hundreds of units. Finding the right balance is about matching your purchasing habits to your sales volume and service goals.
That’s where the concept of service level comes in. It’s the trade-off between how ready you are to fulfill an order and how much capital you’re willing to tie up in inventory. The higher your desired service level, the more you’ll keep on hand, and vice versa.
Other factors that influence stocking decisions include:
| Lead Time | The longer it takes to get a product from your supplier, the more you may want to keep in stock. |
| Demand Variability | If sales are unpredictable, holding extra stock can prevent delays, but overdoing it risks waste. |
| Seasonality | Products with limited selling windows require careful forecasting to avoid leftover inventory. |
Modern ERP systems (like Acumatica) make it much easier to strike this balance. By analyzing data on sales, supplier performance, and current stock levels, the system can recommend reorder points, safety stock quantities, and purchase timing.
Those suggestions aren’t just guesses; they’re based on real patterns in your business. Companies that rely on this data-driven approach tend to make more confident decisions about when to buy, how much to carry, and where to allocate cash.
On the other hand, businesses that haven’t updated their calculations in years often find themselves under- or over-stocking because they’re relying on outdated assumptions. In today’s environment, agility and data visibility go hand in hand.
There’s no one-size-fits-all rule for inventory management. The right mix of stocked and non-stocked items depends on your products, your customers, and your comfort with carrying costs.
But with the right tools and a clear understanding of how each type functions, you can create an inventory strategy that balances cost control with customer satisfaction and keeps your business running smoothly.
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