In Business Central you can define different locations to organise where your items are stored and how they are handled. A location is typically a geographically defined place where you keep stock. Setting up separate locations gives you two practical capabilities.
First, you can plan per location. By creating a stock keeping unit (SKU) for an item on a specific location, you can set planning parameters that differ from the item’s standard setup. You can give one location a fixed reorder quantity with its own reorder point and safety stock, while another location uses a different policy. You also get item availability per location, so you can compare stock across locations.
Second, you can control costing per location. In the Inventory Posting Setup you assign accounts to each combination of location code and inventory posting group. This lets you post inventory value to different accounts depending on the location, so you can follow the inventory value for each location separately.
What a location is in Business Central
A location in Business Central is typically a geographically defined spot where you store your items. In the location list you can see all the locations you have set up. Defining separate locations serves two main purposes: planning specifically per location, and managing costing per location.
Planning per location with stock keeping units
To plan per location you use stock keeping units. A SKU is basically an item defined on a specific location. The same item can have several SKUs, one for each location it is handled on.
If an item is only defined as a SKU on location Simple1, you can create the same item on location Simple2 by entering the item number and the location code. On that new SKU you can then set parameters that apply only to the item on that location.
For example, instead of using a standard reorder policy, you might set a fixed reorder quantity with its own reorder point and safety stock for that one location. The SKU then differs from both the standard item setup and from the SKU on the other location. When you go back to the SKU list, you can see both stock keeping units for the item.
Controlling costing per location with inventory posting setup
The second purpose is to manage costing per location. In the Inventory Posting Setup you define a line for each combination of location code and inventory posting group code. Each line points to the different accounts where you want that inventory to be reflected.
This means you can use the location to control costing as well as planning. By posting inventory value to different accounts per location, you can see the inventory value on each of your locations.
Q&A
What is a location in Business Central?
A location is typically a geographically defined spot where you store your items. You can set up several locations and see them in the location list. Locations let you plan and manage costing separately for each place where you keep stock.
What is a stock keeping unit (SKU) in Business Central?
A SKU is an item defined on a specific location. The same item can have multiple SKUs, one per location, and each SKU can have its own planning parameters such as reorder policy, reorder point and safety stock.
How do you set different planning parameters for the same item on different locations?
You create a stock keeping unit for the item on each location by entering the item number and the location code. On each SKU you can then set parameters that apply only to that location, for example a fixed reorder quantity with its own reorder point and safety stock, independent of the standard item setup.
How do you control inventory costing per location in Business Central?
You use the Inventory Posting Setup, where you define a line for each combination of location code and inventory posting group code. Each line points to the accounts that reflect that inventory, so you can post and follow the inventory value separately for each location.
Can you see item availability per location?
Yes. When you plan per location using stock keeping units, you can see item availability on a specific location and compare it to other locations.