In SAP Materials Management, stocks are managed on the basis of storage locations. Storage locations represent actual godowns, warehouses, where an organization stores inventory. In real business scenarios, one may need to transfer stocks from one storage location to another. In terms of SAP MM, transfer posting refers to the process of removal of materials from one storage location and their transfer and placement in another storage location.
Related: Movement Types in SAP MM Inventory Management
SAP MM provides a lot of flexibility in transfer posting or stock transfers as in that stocks can be transfered within the same plant or between two plants or company codes. Transfer postings in SAP MM should be looked upon as accounting for materials. Materials may be transferred to another location once quality inspection is complete, consignment stock is taken as own stocks etc. Normally stock transfer should reflect actual physical movement of stock from one location to another. But materials can also move at a different date and time. One point to note is that if physical movement is later, this may pose issues in terms of taking physical inventory of goods. Transfer postings thus represent an internal transfer of materials within the SAP MM system.