A transfer order in Business Central lets you move inventory from one location to another with a full paper trail. This article covers how to create and post a transfer order, what happens to stock during transit, and how transfer routes save you setup time.
What a Transfer Order Is and When to Use It
In Business Central, a location is any place where you track inventory. It could be a large warehouse, a small depot, a truck, or even a sales representative’s car. When stock moves from one location to another, your inventory records need to reflect that move. Otherwise the counts at each location are wrong.
A transfer order handles that move. Specifically, it records the item, the quantity, where it is coming from, and where it is going. It also gives you a document you can print and hand to a truck driver so the receiving team knows exactly what to expect. However, before you create a transfer order, it helps to understand the difference between locations and bins. A location is the warehouse or site. A bin is a shelf or rack inside that location. They are not the same thing, and a transfer order moves stock between locations, not between bins.
Creating a Transfer Order
Setting Up the Header
To create a transfer order, search for Transfer Orders and open a new record. First, set the Transfer-from Location – this is where the stock is leaving. Then set the Transfer-to Location – this is the destination. Finally, set the In-Transit Code. This is a special location that represents items on the move that have not yet arrived. Business Central requires it so the system always knows where every unit of inventory is. Without it, you cannot post the transfer.
Additionally, you can add shipping details on the header. For example, set a shipping method and a shipping agent such as FedEx. These fields are optional, but they are useful when you need to track which carrier is handling the shipment or when you want that detail on the printed document.
Adding Lines and Printing
Next, add the items you want to move on the transfer lines. Set the item number and the quantity for each line. Indeed, you can transfer multiple items on one order. Once the lines are in place, you can print the transfer order. The printout shows the from and to location, the shipping details, and all the lines. Then hand this to the truck driver so the receiving team knows what to expect.
Business Central can fill in the In-Transit Code automatically if transfer routes are set up. A transfer route tells the system which in-transit code to use for a given pair of locations. So when you select the from and to location, the code appears on its own. More on transfer routes at the end of this article.
Shipping the Transfer Order
When the items are ready to leave, post the transfer order and choose Ship. Business Central moves the quantity from the source location into the in-transit location. The stock is no longer in the original warehouse – it is in transit. If you ran an inventory count at the source right now, those items would not show up there. Instead, they appear under the in-transit location until the destination receives them.
This in-transit step matters most when shipments take time. For instance, if you buy goods from a supplier in Asia, you own that inventory the moment you purchase it. However, it may be on a ship for weeks before it reaches your warehouse. The in-transit location lets you track that stock during the journey so your inventory records stay accurate throughout.
The in-transit concept also applies to moves between your own sites. For example, if you transfer items from a main warehouse to a regional depot and the truck takes two days to arrive, the items are not in either location during that time. They sit in the in-transit location. That way, if someone checks stock at either site during those two days, they get an accurate count. Overall, the in-transit location is what makes the transfer order a reliable tool for inventory tracking – not just a paperwork step.
Receiving at the Destination
When the goods arrive at the destination warehouse, open the transfer order and post it again, this time choosing Receive. Enter the quantity to receive. In practice, the receiving team counts the items off the truck and enters the actual count – not just what was shipped. This is a useful check. If there is a discrepancy, you catch it here rather than finding out later.
Once you post the receipt, Business Central moves the stock from the in-transit location into the destination. The transfer order closes and moves to Posted Transfer Receipts and Posted Transfer Shipments. Both documents stay in the system as part of the audit trail for that item. So you can always look back and see what was shipped, when, and where it went.
This two-step process – ship first, then receive – mirrors how sales orders and purchase orders work in Business Central. It also gives each warehouse team a clear moment to confirm the transaction. The shipping team confirms what left. The receiving team confirms what arrived. As a result, both sides have a record and any discrepancy is easy to trace.
Transfer Routes and Automatic In-Transit Codes
Setting up transfer routes saves time when you move inventory between the same pairs of locations regularly. A transfer route links a specific from-location and to-location to a default in-transit code. When you create a transfer order and pick those two locations, Business Central fills in the in-transit code for you.
Without a transfer route, you need to fill in the in-transit code manually every time. That is easy to forget, and a missing in-transit code will stop the posting with an error. You would then need to go back, fill in the code, and try again. Therefore, if you have a standard set of location pairs you move between, set up transfer routes for each one. It is a small one-time setup task that prevents a recurring source of mistakes across the team. Additionally, it makes the transfer order process faster for anyone creating them on a daily basis.
Wrapping Up: Transfer Orders vs. Other Methods
Business Central also has reclassification journals as a way to move inventory between locations. However, transfer orders give you more control. You get a printable document, a clear shipment and receipt step, posted records for both sides of the move, and a full audit trail. In short, if you move inventory regularly between locations and need clear documentation and full traceability, transfer orders are the right tool for the job.
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