You can either accumulate inventory just at the company level, or you can have any number of locations under the company. If you create an inventory location under a company then you can no longer accumulate inventory at the company level and you must choose a location for any transactions.
By default, if no locations are created for external companies then all inventory here is ignored from calculations about on-hand and total inventory. For your company, all transactions are counted by default.
If you wish to change this behavior then you must create locations and tailor their behavior according to the following options. There are two parameters which each affect how inventory is calculated:
Contributes to total inventory – this means any inventory at this location will be counted towards the overall total quantity and the combined value of stock of the item. You would normally want this to be true for internal locations, and probably false for external locations.
Contributes to available on-hand inventory – any inventory at this location will appear as available for use. You will generally want this to have the same value as Contributes to total inventory.
However, some exceptions apply to the standard settings described above. There will be cases where you want Contributes to total inventory checked and Contributes to available on-hand inventory unchecked. One example is for a QC Hold location. You want to have any stock in that location count towards your overall total (otherwise it would disappear from your books), but you don’t want it to appear available for use. Moving stock into or out of QC Hold is a double-sided transaction.
Another example is if you are tracking orders from suppliers (a single-sided transaction). The same conditions apply as for QC Hold, where you want to see the total count and value of the order appear in your records, but you don’t want to show the inventory as available for use. When you then receive the order (and assuming you have Receive Stock set-up as a double-sided transaction) you would record it as coming from the location where the order was made, and what location you received it into. This action would decrease the On Order amount by what was received. If the quantity received is not the same as what was ordered then you can zero this out by adjusting the ordered amount, or hold the order open for any stock that might have not been supplied.
If you want to set-up separate warehouses, then we suggest that you do it at the Company level. Meaning, create a new Company that is the warehouse in question. Then you can create any number of locations under that, each having their own properties.