Inventory Flow

The way that inventory flows through Orderwerks and the expected process a user takes will help in keeping your inventory numbers accurate.

Inventory Allocation Types

There are several ways in which inventory is tracked for a Catalog Item:

Column	Description
Qty. on Hand	The available inventory that can be used to fulfill new orders.
Reserved Qty. on Hand	Inventory that has been allocated to submitted (non-preliminary) orders and is waiting to be shipped or fulfilled.
Qty. Backordered	The total quantity across all orders that is pending — waiting for inventory to become available.
Qty. Held for Backorders	Inventory that the system has automatically set aside from the available pool to fulfill existing backorders. This inventory is not available for new orders.

At the order item level, there are also key quantities:

Column	Description
Qty. Reserved	How many units of this line item are reserved from inventory.
Qty. Pending	How many units of this line item are waiting for inventory (backordered).
Qty. Shipped	How many units have been shipped.

Order Lifecycle and Inventory

Preliminary Orders

When an Order is in Preliminary, no inventory is allocated. You can build out the order freely. You can only place an order for what is available on hand, unless the item allows backorders. Any attempt to submit an order where there is not enough inventory available will return an error and highlight the rows with issues and the max available quantity.

Submitting an Order

Once a Preliminary order is submitted, inventory moves from Qty. on Hand to Reserved Qty. on Hand for each line item on the order.Example: You submit an order for 100 units of an item that has 500 on hand.

Qty. on Hand goes from 500 → 400
Reserved Qty. on Hand goes from 0 → 100
Order item Qty. Reserved = 100

Submitting an Order with Backorders

If an item allows backorders and you order more than what is available, the system will partially reserve what it can and mark the remainder as pending (backordered).Example: You submit an order for 500 units of an item that has 100 on hand and allows backorders.

Qty. on Hand goes from 100 → 0
Reserved Qty. on Hand goes from 0 → 100
Qty. Backordered = 400
Order item: Qty. Reserved = 100, Qty. Pending = 400

If the order is submitted with Allow Partial Fulfillment enabled, a child backorder is automatically created for the pending items. The original order keeps only the fulfilled portion, and the pending items are moved to a new backorder order linked to the parent.

Cancelling an Order

When a submitted order is cancelled:

Reserved Qty. on Hand is released back to Qty. on Hand for each line item.
If the order had pending (backordered) items, the catalog item's Qty. Backordered is recalculated.
If Qty. Held for Backorders exceeds the new backordered amount, the excess is released back to Qty. on Hand.

Deleting an Order

When a submitted order is deleted:

Inventory is released the same way as cancellation.
If the deleted order is a child backorder, the parent order item's Qty. Backordered is recalculated to reflect only the remaining active child backorder items.
The catalog item's Qty. Held for Backorders is clamped to not exceed the updated Qty. Backordered.

Note: Orders that have already been shipped, delivered, or picked up cannot be deleted. You will need to manually adjust inventory, change the order status, and then cancel the order.

Releasing Reserved Inventory (Fulfillment)

The reserved inventory remains in Reserved Qty. on Hand until the order reaches one of its final fulfillment states:

Shipped: You create a Shipment Group and add at least one shipment. At this point, Reserved Qty. on Hand is released as the inventory has left the building.
Local Delivery: You create a Shipment Group with the "Is Local Delivery" option checked. When delivered, you capture the signature and delivered-to name within the Shipment Group. Once saved, Reserved Qty. on Hand is released.
Local Pickup: You create a Shipment Group with the "Is Local Pickup" option checked. When picked up, you capture the signature and pickup person name within the Shipment Group. Once saved, Reserved Qty. on Hand is released.

Important: Manually moving an order to one of these end states as an Admin will not trigger this inventory release and will cause Reserved Qty. on Hand to reflect incorrectly. Always use the proper shipment workflow.

Release Inventory on Fulfillment Status

If the Release Inventory on Fulfillment Status supplier setting is enabled, reserved inventory is automatically released when an order is moved to a fulfillment status (Shipped, Delivered, or Picked Up) — even without creating a Shipment Group or shipment records. This is useful for suppliers who track order status manually and don't use the full shipment workflow but still want inventory counts to stay accurate.When this setting is disabled (the default), inventory is only released through the proper shipment workflow described above.

Backorder Flow

How Backorders Are Created

Backorders can be created in three ways:

Automatic (Partial Fulfillment): When submitting an order with Allow Partial Fulfillment enabled, any items that cannot be fully reserved are automatically moved to a new child backorder order. The original order keeps the fulfilled portion.
Automatic (Full Backorder): When submitting an order without Allow Partial Fulfillment and there is not enough inventory to fulfill the order, the entire order can be backordered. No inventory is reserved — the full quantity is marked as pending.
Manual: A supplier can manually create a backorder from an existing order, selecting which items and quantities to backorder.

A child backorder is linked to its parent order via

parent_order_id

, and each backorder line item is linked to the original line item via

parent_order_item_id

Auto-Hold for Backorders

When new inventory is added to the system (for example, through a Purchase Order shipment) and there are active backorders for that item, the system can automatically hold a portion of the incoming inventory for those backorders.

Qty. Held for Backorders is increased by the amount needed to cover outstanding backorders.
This held inventory is not available for new orders — it is reserved for backorder fulfillment.
Auto-hold can be enabled or disabled per supplier.

Allocating Held Inventory

A supplier can manually allocate held inventory to specific backorders:

The held inventory moves from Qty. Held for Backorders to Reserved Qty. on Hand.
The backorder item's Qty. Pending decreases and Qty. Reserved increases.

Fulfilling Backorders

Backorders can be fulfilled when inventory becomes available:

Fulfill Backorders by Order processes selected backorders and reserves available inventory.
Preliminary backorders are submitted (triggering normal inventory reservation).
Non-preliminary backorders have their pending items converted to reserved.
If held inventory is available, it can be consumed first.

Modifying or Deleting Backorder Items

When a child backorder item is modified or deleted:

The parent order item's Qty. Backordered is recalculated based on remaining active child backorder items.
The catalog item's Qty. Backordered is recalculated from the sum of all pending quantities.
Qty. Held for Backorders is clamped so it does not exceed the new Qty. Backordered. Any excess is released back to Qty. on Hand.
The parent order item is preserved for audit trail — it is not deleted, even if Qty. Backordered drops to zero.

Warehouse Inventory

If your account uses warehouses, inventory is tracked at both the catalog level and the warehouse level:

Each warehouse has its own Qty. on Hand and Reserved Qty. on Hand for each catalog item.
When an order is submitted with a shipping warehouse, inventory is reserved from that specific warehouse.
The catalog-level quantities are the aggregate across all warehouses.
When inventory is shipped, both the catalog-level and warehouse-level reserved quantities are released.

Summary: Inventory Quantity Relationships

Rule	Description
Qty. on Hand decreases	When orders are submitted (reserved)
Reserved Qty. on Hand increases	When orders are submitted
Reserved Qty. on Hand decreases	When orders are shipped/delivered/picked up
Qty. Backordered	Always equals the sum of all pending quantities across order items
Qty. Held for Backorders	Never exceeds Qty. Backordered (clamped after deletions/cancellations)
Qty. Held for Backorders increases	When new inventory arrives and auto-hold is enabled
Qty. Held for Backorders decreases	When held inventory is allocated to backorders, or backorders are cancelled/deleted