What is an inventory transfer between warehouses?

  • Last update: 10.04.2024
  • Published: 24.04.2023
  • Read in: 6 min

Inventory transfer is a synonymous term for what is known as an MM (Material Movement) document or an inventory transfer between companies. These documents serve to maintain a record of goods transferred within a single company’s inventory.

Similarly, the process of relocating goods between warehouses under the same company’s umbrella is also recognised as Material Movement.

What is an inventory transfer between warehouses?

Which Polish Act regulates the flow of warehouse documents?

In Poland, the legislation that pertains to the documentation of stock turnover is the Accounting Act of 29 September 1994.

What is the MM document?

The MM (material management) document functions as an official confirmation of material transfers between warehouses. Its role is to supervise the movement of goods, commencing from their departure from the source warehouse and concluding upon their arrival at the target warehouse.

An MM document is generated upon the sale or purchase of goods, or when items are transferred for operational motives. This might include addressing heightened demand for a specific product category near the destination warehouse or optimising storage capacity.

What should a MM document contain?

An inventory transfer should include the following information:

  • MM document number,
  • Issue and receipt dates,
  • Product name,
  • Product ID,
  • Batch number,
  • Source warehouse for the goods movement,
  • Destination warehouse for the goods movement,
  • Signature of the employee responsible for receiving the goods,
  • Unit of measure,
  • Quantity of goods,
  • Expiration date.

Other warehouse documents

Apart from the MM document, there are other warehouse-related documents that can be categorised as inbound and outbound documents. However, before we delve into describing these specific documents, it’s important to highlight that the MM document falls both within the inbound and outbound document categories.

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Inbound Warehouse Documents

External Receipts (ER) and Internal Receipts (IR)

External receipts are documents issued by warehouse personnel based on delivery confirmations, for non-commercial receipt of goods, or for purchases.

On the other hand, internal receipts are issued when there is an intra-company transfer of goods between warehouses, with no external entities involved. It’s important to note that the key difference between internal receipts and the MM document lies in the level of detail – internal receipts offer a more intricate overview, serving as a confirmation of material receipt across various business units, while MM is a broader document related to material management, also used for invoicing.

Both external and internal receipts should include, among others:

  • Dates of document issuance and goods receipt
  • Document number
  • Supplier’s details and signatures, alongside the issuer’s details for ER 
  • Information about the received goods

Internal Return (IR)

Internal Return (IR) is a type of document issued during the withdrawal of goods, which may or may not return to the warehouse in the future. For example, IR is issued when tools or materials are taken out, with the possibility that some of these items might find their way back to the warehouse at a later time.


Outbound Warehouse Documents

Goods Issue (GI)

Goods issue is a document confirming the issuance of goods from warehouses, usually due to sales or transfers.

Similar to IR, the distinction between Goods Issue (GI) and MM lies in the fact that the MM document is more general and serves material management purposes within the company, whereas GI validates the release of materials from the warehouse to entities outside the company, such as customer sales.


Goods Receipt (GR)

Goods Receipt (GR) is a document validating the issuance of materials from warehouses due to internal company needs, such as providing office supplies from the warehouse during replenishment. The Goods Receipt (GR) is issued by the department responsible for authorising the release of the stored goods.

When is a MM document issued?

There is no specific date set for determining the deadline for issuing MM documents. Instead of issuing them separately after each warehouse inventory transfer, they can be collectively generated, such as at the end of the settlement period.

Moreover, the documents a company chooses to use are determined by the company’s accounting policy.

While using the MM document is a widely adopted practice, business owners sometimes split it into two alternative forms:

  • MW Document – Issue from inventory, used to generate an MP,
  • MP Document – Receipt into inventory, used to post in the receiving warehouse.

Inventory transfers do not create tax liability

Additionally, it’s important to highlight that legal rules clearly indicate that the transfer of goods does not qualify as a sale. As a result, creating the document does not carry the same implications as a tax obligation.

Inventory transfer - summary

Inventory transfers are a highly significant logistical aspect for every e-commerce business.

Functioning as a process, enabling the maintenance of optimal inventory levels in areas where specific products enjoy a higher demand, streamlining shipping and minimising delivery times. Furthermore, strategic allocation of merchandise permits efficient utilisation of available storage space or even creating such space that will be more suitable for other groups of goods. 

Conversely, as a document, a warehouse transfer or MM document serves as a mechanism for documenting inventory turnover. This facilitates easy tracking and monitoring of the current location of goods.

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Antoni Merkun Copywriter and marketer, who has been cooperating with Taxology since March 2023. Interested in SEO and content marketing.