8 Key Business Central Inventory Management Features for Australia

Business Central Inventory Management is an integrated suite of capabilities within Microsoft Dynamics 365 Business Central, designed to provide Australian businesses with granular control over their stock, optimising efficiency and profitability from procurement to sales.

Drawing from Havi’s 9+ years of experience implementing ERP solutions for Australian businesses, inventory inaccuracies and compliance complexities consistently emerge as primary operational challenges. This highlights the necessity of a unified system tailored to Australia's GST and ABN tracking requirements.

This article will unpack eight key Business Central inventory management features based on Microsoft's official learning documents, examining how they empower Australian enterprises. We will also delve into specific localisation benefits and the vital role of expert partner support, offering unique insights for businesses operating in Australia.

1. Inventory and Item Management

Inventory and Item Management in Business Central is the process of defining, classifying, and structuring items into inventory, non-inventory, and services to enable accurate tracking, costing, and compliance reporting. It encompasses item variants, attributes, and responsibility centres, supporting precise GST calculations and streamlined stock management tailored for Australian regulatory standards.

• Creating and Classifying Items: Business Central allows companies to register items as inventory, non-inventory, or service types, effectively structuring stock and streamlining operations. Items are categorised using product variants, attributes, and catalogue references, significantly reducing duplication and enhancing clarity in inventory databases.
• Responsibility Centres: Assigning responsibility centres enables companies to distribute item management and inventory ownership across different departments or physical sites, aligning operations with accountability.

2. Inventory Tracking and Item Availability

Inventory Tracking and Item Availability in Business Central is the capability to monitor real-time stock levels, track items by serial, lot, or package, and manage strategic reservations and inventory controls. It ensures traceability, compliance, and efficient operational planning.

• Serial, Lot, and Package Tracking: Tracking through serial, lot, and package numbers ensures traceability from receipt through distribution, essential for industries requiring compliance and rigorous quality control standards.
• Stock Visibility and Reservation: Business Central provides clear, real-time visibility of item availability by location, variant, and date, enabling strategic reservation of stock for sales, production, or service jobs.
• Blocking and Substitution Controls: Controlling inventory lifecycles through blocking and substitution prevents obsolete or compromised items from being distributed, thus maintaining product integrity and regulatory compliance.

3. Inventory Transactions and Adjustments

Inventory Transactions and Adjustments in Business Central refer to processes used for accurately recording physical stock counts, adjusting stock levels, and transferring inventory between locations, ensuring precise valuation and accountability.

• Counting and Adjustment Practices: Accurate physical and cycle counting is streamlined via journals and inventory documents, enabling precise stock adjustments and regular reclassification as required.
• Inventory Transfers Between Locations: Transfers between warehouses or locations in Business Central maintain comprehensive traceability, ensuring stock levels reflect true availability and location-specific demand.

4. Warehouse Operations and Movements

Warehouse Operations and Movements in Business Central include processes for efficiently receiving, storing, picking, and transferring goods within warehouses, leveraging directed pick and put-away to optimise material flow and accuracy.

• Receiving and Put-away Operations: Efficient inbound operations are managed through basic and advanced warehouse configurations, including automated inventory put-away, directed picking, and bin management, enhancing operational efficiency.
• Outbound Picking and Shipping: Accurate picking, staging, and shipping processes are centralised through warehouse shipments, minimising fulfilment errors and optimising outbound logistics workflows.
• Internal Item Movements: Business Central simplifies internal movements, such as bin transfers and managing production outputs, linking warehouse operations seamlessly with assembly, production, and job activities.

5. Inventory Analysis, Reporting, and Planning

Inventory Analysis, Reporting, and Planning in Business Central unifies historical reporting, live dashboard visualisation, and automated planning tools to guide strategic inventory control. From historical stock valuation and KPIs to automated replenishment suggestions via the Planning Worksheet, the system equips businesses with the insights and control needed to maintain optimal stock levels and respond effectively to demand.

• Built-In Reporting: Business Central includes built-in inventory reports such as Transaction Detail, Top 10 Lists, Item Valuation, and Inventory Back Orders, essential for informed decision-making and accurate stock management.
• Power BI Integration: Integration with Power BI allows visual analytics of inventory valuation, KPIs, and other critical metrics, empowering strategic decision-making based on real-time data insights.
• Ad-Hoc Inventory Analysis: Ad-hoc analytical capabilities facilitate forecasting and planning, enabling precise responsiveness to market demand and operational adjustments.
• Planning and Forecasting Tools: The planning tools automate replenishment by generating purchase, transfer, or production suggestions based on forecasts, stock levels, and item policies. Using the Planning Worksheet, businesses apply settings like lot-for-lot and safety stock to maintain optimal inventory and avoid stockouts or excess. These tools ensure inventory decisions are timely and data-driven.

These planning and forecasting tools are part of Business Central ERP’s continuous evolution from Microsoft Dynamics NAV — empowering Australian SMEs with both modern features and local adaptability.

6. AI-Ready Inventory Management with Copilot

AI-Ready Inventory Management with Copilot in Business Central leverages artificial intelligence to provide real-time inventory insights, natural-language queries, predictive analytics, and automation of repetitive stock management tasks.

• Natural Language Insights: Microsoft Copilot integrates advanced AI into inventory management, allowing stakeholders to query inventory statuses, forecast demands, and identify replenishment requirements through intuitive natural-language prompts.
• Automated Forecasting and Trend Analysis: Copilot's pattern recognition capabilities proactively identify anomalies, stockouts, or excess inventory, driving smarter inventory decisions and significantly reducing manual forecasting efforts.
• Task Automation: AI-powered agents within Copilot automate routine inventory management tasks, freeing teams to focus on strategic operational priorities.

7. Omnichannel Inventory Sync with Shopify

Omnichannel Inventory Sync with Shopify in Business Central automatically synchronises real-time stock, product data, pricing, and order fulfilment between Shopify and Business Central, ensuring consistency and compliance with Australian GST rules. Microsoft offers a free connector. However, to use it, you'll need a paid license for both platforms and the correct user permissions assigned within Business Central.

• Real-Time Synchronisation: Integration between Business Central and Shopify ensures product data, stock levels, and pricing remain accurate across both online and physical sales channels, preventing overselling and inventory discrepancies.
• Fulfilment and Reconciliation: Streamlined order fulfilment processes connect Shopify sales directly to Business Central's inventory workflows, ensuring accuracy and speed from order placement through delivery.
• Compliance with Australian Regulations: Localised pricing, taxation, and regulatory compliance (including GST) are seamlessly managed through integrated rules, eliminating the complexities of manual reconciliations and external tax calculations. As a certified Microsoft Partner, Havi helps Australian businesses tailor these integrations to meet Shopify-specific workflows, ensuring accuracy and compliance from day one.

8. Integration with Dynamics 365 Field Service

Integration with Dynamics 365 Field Service in Business Central connects inventory management with field service operations, enabling field technicians to access real-time stock visibility and automate replenishment, directly aligning inventory usage and service activities.

• Field Inventory Accessibility: Field technicians gain real-time visibility into warehouse stock, enabling informed decision-making and immediate service delivery.
• Automated Inventory Usage Tracking: Inventory consumed during field operations is accurately tracked and automatically triggers replenishment processes, optimising stock availability and reducing downtime.
• Unified Operational Analysis: Connecting service activities with inventory data provides comprehensive analytics, enabling strategic insights into service performance and inventory efficiency.

Businesses integrating Field Service can further benefit by exploring how CRM and Sales modules connect with inventory management through the broader Dynamics 365 suite.

Expanding Business Central Inventory for Australia

While these inventory management features form a comprehensive operational framework, their full value for Australian businesses emerges when combined with localisation functionalities, ensuring compliance with GST, ABN tracking, and local regulatory requirements.

Compliance and Localisation in Australia

Business Central supports Compliance and Localisation in Australia through integrated GST processing, ABN management, and comprehensive audit-tracking functionalities tailored to Australian regulatory requirements.

• Managing GST in Inventory Transactions: Business Central manages GST in Inventory Transactions by automatically applying accurate GST calculations across purchasing, sales, and inventory adjustments, ensuring correct BAS reporting and compliance with Australian taxation laws.
• ABN Tracking and Audit Preparedness: ABN Tracking and Audit Preparedness in Inventory Transactions is facilitated in Business Central by capturing ABNs within vendor and customer records, maintaining detailed audit trails for transparent reporting and simplified ATO compliance.

Getting Started with Inventory in Business Central (For Australian Teams)

1. Should I map my existing inventory before setting up Business Central?

Yes — Pre-setup inventory mapping ensures data integrity, reduces migration errors, and facilitates rapid, accurate implementation. For businesses considering Business Central for the first time, understanding product modules, pricing tiers, and setup structure is essential.

2. Who from my team should be involved in the inventory setup phase?

Key personnel should include:

• Inventory or Warehouse Manager
• Finance or Accounting Lead
• Operations Manager
• IT Lead or System Administrator
• Certified Microsoft Partner Consultant

3. What’s the benefit of choosing an Australian Microsoft Partner for setup?

Selecting an Australian Microsoft Partner ensures your local regulatory alignment, leveraging industry expertise for compliant, efficient deployment and ongoing support.

Microsoft Dynamics 365 Business Central provides comprehensive inventory management features, supporting accurate tracking, GST compliance, and efficient operational control. To fully leverage these capabilities, Australian businesses should engage experienced local partners, ensuring the system aligns precisely with their operational requirements.

For tailored Australian implementation, schedule your personalised demonstration or consultation with a certified Microsoft Partner in Australia today.

References:

• Microsoft Learn. Manage inventory.
• Microsoft Learn. Warehouse management overview.
• Microsoft Learn. Australia local functionality.
• Microsoft Learn. Create items in Business Central.
• Microsoft Learn. Adjust inventory with the item journal.
• Microsoft Learn. Create put-away templates.