Back to Glossary

Entry · Business

Putaway

Putaway is the warehouse process of moving received and approved goods from a receiving or staging area to a recorded storage or pick location. It connects physical placement with inventory data. A receipt posted in the system is not the same as goods safely located and ready to pick.

From the Money Master HQ dictionary, founded by Shihan Sheriff (FCMA, VP of Finance at Nomod, CFO at Esanjo Ventures). How these definitions are written.

What it means

A delivery of cartons is counted at the dock, and workers then move each carton to a suitable bin and confirm the location. If they skip that second step, the system may show stock that pickers cannot find.

Oracle's directed putaway documentation describes scanning a pallet or case and its assigned location to confirm the move, which is one software method, not a requirement to buy that system. Shopify's receiving-inventory guidance discusses verifying deliveries and organising stock for storage, and receiving and putaway should be connected, but the acceptance and location milestones remain distinct.

Verify eligibility, since damaged, recalled or quality-held goods need a controlled area, not a normal saleable pick location, and putaway should follow the release rule. Choose a suitable slot and respect capacity, because product size, weight, temperature, hazardous class and shelf-life needs affect where goods can safely go, the nearest free shelf may be wrong, and a bin designed for light cartons should not be overloaded with heavy pallets, so check rack ratings and safe handling requirements.

Use identifiers, since SKU, lot, serial and pallet labels help match the physical item to the system record and a similar-looking carton can contain a different variant. Record both ends, because the transfer from receiving zone to bin should decrement one location and increment the other, and a one-sided update creates phantom stock.

Confirm the actual location, as scanning a suggested bin while placing goods elsewhere defeats directed putaway, so train staff to report blocked or full locations. Plan exceptions, since a proposed slot may be occupied, damaged or inaccessible, and the system or supervisor should authorise an alternative and record it.

Separate reserve and pick stock, because bulk pallets may go to reserve storage with smaller quantities replenishing pick faces later, and both locations need accurate counts. Consider rotation too, since earliest-expiring eligible stock may need accessible placement under FEFO (first expired, first out), and arrival order alone may not suit dated goods.

An illustrative putaway completion measure is received approved units confirmed in valid locations divided by all approved units awaiting putaway, so if 90 of 100 are located, completion is 90% and the other ten are still staged. Time matters, since long delays in a receiving lane can block trucks and delay sales availability, so measure queue age as well as the percentage placed.

Check accuracy, because a completed scan does not prove the right product was put on the shelf and periodic bin audits detect mismatches, and protect traceability by keeping lots together or maintaining precise mixed-bin records where allowed so that a recall response can locate affected units quickly. Coordinate inventory availability, since some businesses make stock sellable on receipt while others wait for putaway, and the promise to customers should match operational ability to pick.

Train for safe movement, because forklift routes, pedestrian separation and lifting rules remain necessary and speed targets cannot justify unsafe handling, and review slotting, since fast-moving goods may deserve closer pick positions while bulky or slow-moving stock belongs elsewhere, with a controlled move record for re-slotting. Set a clear ownership handoff so the next shift sees a staged pallet's status, location and priority, check short shipments at the right stage (a received quantity discrepancy belongs in the receipt record, while a misplaced accepted carton belongs in the location investigation), and remember that for owners putaway turns arrived stock into findable stock, requiring safe placement and a trusted location record, not just a closed receipt.

In practice

Real-world examples.

1

Example

A pallet of canned goods is scanned into a storage rack after goods inward approval. The scan records the pallet label and the rack location together. Pickers can then find it the same day.

2

Example

A damaged carton of electronics is placed in quarantine, not a saleable pick bin. The location is coded as held, so the system will not offer the stock to customers. A supervisor decides later whether to return it.

3

Example

A full suggested slot for a pallet of beverages triggers an approved alternative location. The supervisor authorises a nearby rack and the operator scans it. The record shows both the original suggestion and the final location.

Formula

Calculation

Illustrative putaway completion = approved received units confirmed in valid locations / approved units awaiting putaway x 100. 90 / 100 = 90%. Worked example. A fictional warehouse receives 100 approved units, and 90 are scanned into valid bin locations by the end of the shift. - Putaway completion = 90 / 100 x 100 = 90%. - The other 10 units are still staged, and if they have waited 6 hours the queue age is reported alongside the percentage. - A later bin audit checks 50 bins and finds 47 holding the product and quantity the system shows, so location accuracy = 47 / 50 x 100 = 94%. The three mismatches are investigated before the next audit.

Case study

Seen in the real world.

This entirely fictional example follows Harbor Parts. Its system showed a received shipment as available, but cartons remained in a dock lane. It changed the workflow so location confirmation preceded the ready-to-pick status. The team checked safety and lot records as part of the move.

The case does not claim all systems use the same availability setting. In the invented numbers, the dock lane held 40 cartons for an average of two days before the change, and customer orders for those items were delayed or cancelled. After the change, cartons reached a bin location the same day, and the number of orders waiting on stock that was physically on site fell to nearly zero. Cycle counts also improved, because every carton now had a recorded location.

Watch out

Common mistakes.

  • Marking goods ready to pick solely because receipt was posted.
  • Scanning one bin while placing the item in another.
  • Putting held or incompatible goods into an ordinary storage slot.

Questions

People also ask.

What is putaway?

Moving received goods into a suitable recorded warehouse location.

Is putaway the same as receiving?

No. Receiving confirms arrival; putaway confirms physical storage location.

How is location accuracy checked?

Use location confirmation and periodic checks against physical stock.

Was this explanation helpful?

From the founder's library

Accounting Fundamentals: A Non-Finance Manager's Guide to Finance and Accounting, by Shihan Sheriff

Take it further with the book.

Build your financial confidence beyond this definition. Shihan's full-length guide, Accounting Fundamentals, takes the same plain-English approach and turns it into a complete, practical playbook for non-finance managers, business owners and students - with chapter-end quiz answers and presentation slides included.

US$2.24US$2.99

25% off with code MMHQ25, applied at checkout. Priced in USD - checkout may show the equivalent in your local currency.

View the book and save 25%
Last updated · October 8, 2026
Browse all terms →

Disclaimer

The information provided in this finance dictionary is for educational and informational purposes only. It should not be construed as financial, investment, legal, or tax advice. Always consult with a qualified professional before making any financial decisions. Money Master HQ makes no representations or warranties about the accuracy, completeness, or suitability of this information. Use of this content is at your own risk.