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Warehouse Management
Business Central Warehouse Management: Location Setup, Bins, Put-Aways and Picks
Last updated: November 3, 2026 · Independent guide · We do not sell rankings or coverage.
Business Central warehouse management is controlled from the location card. Six settings (Require Receive, Require Shipment, Require Put-away, Require Pick, Bin Mandatory and Directed Put-away and Pick) decide whether your team posts straight from the order, works order by order in inventory put-aways and picks, or works across many orders in warehouse receipts, put-aways, picks and shipments. Below you will find which documents each combination creates, how to choose a level, the setup order, and what goes wrong when you change a location that already holds stock.
If you are unsure whether you need warehouse control or only inventory control, start with the difference between warehouse and inventory management.
Before you start
- License: Microsoft’s US pricing page lists warehouse management in Essentials ($80 per user per month, paid yearly) and Premium ($110), so warehousing alone does not need Premium (Microsoft, no date shown, checked November 3, 2026).
- Clean data: no negative inventory and no open warehouse documents at a location you plan to convert (Microsoft Learn, February 28, 2023).
- Warehouse employee records: every user who handles warehouse documents or the Bin Creation Worksheet must be a warehouse employee at the location (Microsoft Learn, August 21, 2025).
- A bin plan on paper: zones, rack-section-level numbering, and which bins are bulk or forward pick. Our bin location system guide covers naming and slotting rules.
- A sandbox: test in a sandbox or company copy before touching the live location.
The configuration levels and the documents each one creates
Microsoft describes six levels of warehouse complexity (Microsoft Learn, February 28, 2023), and its flow pages map the Require settings to documents (inbound, September 29, 2023; outbound, September 4, 2026).
| Level | Location settings turned on | Documents your team works in | Typical fit |
|---|---|---|---|
| 1. No warehouse handling | None | Post from the order line | Small stockroom |
| 2. Bins only | Bin Mandatory | Order lines, bin code required | Tracking where stock sits |
| 3. Basic, order by order | Require Put-away and/or Require Pick (usually with Bin Mandatory) | Inventory Put-away, Inventory Pick, Inventory Movement; posting these posts the receipt or shipment | One person handles an order dock to bin |
| 4. Consolidated receive and ship | Require Receive and/or Require Shipment | Warehouse Receipt, Warehouse Shipment; with Require Put-away and Pick, also Warehouse Put-away, Warehouse Pick, pick worksheet | Separate teams handling many orders |
| 5. Advanced with bins | All four Require settings plus Bin Mandatory | Level 4 documents with bin codes, plus the put-away worksheet | Defined pick faces |
| 6. Directed put-away and pick | Directed Put-away and Pick (bin codes required) | Level 5 documents plus Warehouse Movement, internal picks and put-aways, zones, bin types, ranking, replenishment | System decides the bin |
Microsoft notes that at level 3 you can still post receipts and shipments directly from source documents, despite the setting names. The four Require settings also combine independently, so you can run warehouse receipts with inventory picks if inbound and outbound teams work differently.
How to choose a level for your warehouse
Match the setting to how work is split, not to building size. If one person receives and puts away an order, level 3 gives you a document and audit trail without separate receipts. It also suits light manufacturers, because inventory picks and movements can feed production and assembly.
Move to level 4 or 5 when receiving and shipping are separate teams, trucks carry many orders, or you want to batch picks in the pick worksheet. Choose directed put-away and pick only if you will maintain zones, bin types, rankings and item dimensions. If you mainly want suggested bins, there is a lighter option: since 2023 release wave 2, basic configurations with Bin Mandatory on and Directed Put-away and Pick off can use a Put-away Bin Policy of Put-away templates and a Pick Bin Policy of Bin Ranking (Microsoft release plan, generally available October 2, 2023).
Setup walkthrough: directed put-away and pick
These steps follow the order for the most advanced level. For a basic or level 4 location, do step 1 with your chosen settings, then steps 2, 5, 6 and 9.
1. Turn on the warehouse settings on the location
Go to Search > Locations, select the location, choose Edit, and on the Warehouse FastTab select Bin Mandatory and Directed Put-away and Pick, along with the Require settings for your flow. Other fields can wait (Microsoft Learn, August 21, 2025). If the location already has stock, use the conversion procedure below instead.
2. Set up warehouse employees
Open Search > Warehouse Employees, choose New, and enter the User ID and Location Code. Turn on Default for each person’s working location; users can view but not perform activities at other assigned locations (Microsoft Learn, August 21, 2025).
3. Create bin types
Open Search > Bin Types and create a type for each role. Microsoft recommends RECEIVE, PUTPICK, SHIP and QC, plus PUT AWAY for bulk and PICK for pick-only bins. Bin types apply only to locations that use directed put-away and pick (Microsoft Learn, August 21, 2025).
4. Create zones
On the location card choose Zones. You need at least one zone code even without real zones. Zone changes affect only bins created afterward, so settle zone properties before generating bins (Microsoft Learn, August 21, 2025).
5. Create bins in bulk
Open Search > Bin Creation Worksheet, choose Calculate Bins, pick a Bin Template Code, and enter From and To numbers for rack, section and level. Codes can be up to 20 characters, and letter ranges such as A01 to F05 are not supported, so run one calculation per rack letter. Then choose Create Bins (Microsoft Learn, August 21, 2025).
6. Assign default bins and bin policies on the location
On the location card’s Bins FastTab, set the receipt, shipment and production bins. For a directed location, fill in Adjustment Bin Code to record count discrepancies. On the Bin Policies FastTab, set Bin Capacity Policy, Allow Breakbulk and Put-away Template Code (Microsoft Learn, May 18, 2026). With Use Put-away Worksheet off, posting a receipt creates put-aways immediately; with it on, lines wait in the worksheet (Microsoft Learn, April 23, 2024).
7. Build put-away templates
Open Search > Put-away Templates and choose New. Put your preferred rule first (for example, Find Fixed Bin), add fallback lines, and select Find Floating Bin on the last line. An item or SKU template overrides the location template (Microsoft Learn, May 2, 2025).
8. Set up items
On each item card, complete the Warehouse FastTab, enter dimensions and weight under Units of Measure, and link fixed bins under Bin Contents. The Default field is not used at directed locations (Microsoft Learn, August 21, 2025). Capacity rules need those dimensions.
9. Test the full inbound and outbound flow
Release a purchase order, create a warehouse receipt with Get Source Documents, and post it (Microsoft Learn, January 27, 2025). Register the put-away. Then create a warehouse shipment from a released sales order, choose Create Pick, register the pick, and post the shipment (Microsoft Learn, April 23, 2024). Our warehouse receiving process guide covers the dock controls to test alongside.
Converting a location that already holds stock
For an existing location, use the Create Warehouse Location batch job. Create the adjustment bin, clear negative inventory and open warehouse documents, then run the job with the Location Code and Adjustment Bin Code. It posts all on-hand stock into the adjustment bin; you then post a warehouse physical inventory to place it in real bins. Microsoft warns the job can take several hours and that partly received or shipped documents must be reopened and released afterward (Microsoft Learn, February 28, 2023).
Common mistakes when changing a live location
Turning on settings with open orders in flight. Partly handled orders fall out of step with the new documents. Post open documents first, and reopen and release any that were partly handled.
Treating directed put-away and pick as reversible. Microsoft says you can change the configuration of a location only as long as it does not have item ledger entries (Microsoft Learn, August 22, 2025). If unsure, pilot on a new location code and move stock with transfer orders.
Skipping the physical count after conversion. Stock left in the adjustment bin is not pickable. Run the Warehouse Adjustment Bin report and post the count.
Renaming bins by moving stock. Microsoft’s restructuring procedure moves stock into a new bin system with reclassification journals or movement worksheets. For a pure rename, change the Code on the Bins page and Business Central updates bin contents, activity lines and warehouse entries; run Delete Registered Whse. Documents first on a busy location (Microsoft Learn, August 21, 2025).
Leaving old bins in the item flow. At a directed location, empty old bins with the warehouse reclassification journal or movement worksheets, then set their bin type to QC so item flow ignores them (Microsoft Learn, August 21, 2025).
Ignoring short picks. If Quantity in Warehouse is below the quantity in pickable bins, run Calculate Warehouse Adjustment in the item journal and recreate the pick (Microsoft Learn, April 23, 2024).
Limitations of the native feature
- Bin types apply only to locations that use directed put-away and pick (Microsoft Learn, August 21, 2025). Basic configurations do not support alternative units of measure and ignore Find Unit of Measure Match in put-away templates (Microsoft release plan, October 2, 2023).
- Dedicated bins do not protect stock picked as production or assembly components through the Inventory Pick page (Microsoft Learn, August 21, 2025). See our review of Business Central for manufacturing.
- The standard pages covered here do not describe handheld scanning workflows.
When companies add a third-party tool
The usual add-on is a mobile barcode app for registering receipts, put-aways and picks on handhelds. Tasklet Factory’s Mobile WMS covers receiving, put-away and consolidated picking with offline use; pricing is not published (Microsoft AppSource, no date shown). Insight Works, which sells the Warehouse Insight app and scanners, says its app works under the Essentials license (Insight Works, April 21, 2026). Buildings with automation, labor management or complex slotting needs may justify a standalone WMS integrated with Business Central.
How we researched this
We worked from Microsoft Learn documentation and Microsoft’s US pricing page, checked on November 3, 2026. We also reviewed the ranking partner guides from Stoneridge Software, VJM Global and Folio3, which mostly cover one configuration without mapping settings to documents. We note where a source sells services or add-ons. We did not test in a live tenant.
Related guides
- Business Central Manufacturing: Features, Gaps and Add-Ons
- Business Central Pricing (2026): US License Costs
- Business Central Implementation: Phases and Timeline
Frequently asked questions
What is the difference between an inventory pick and a warehouse pick in Business Central?
An inventory pick covers one source order at locations with Require Pick on and Require Shipment off, and posting it posts the shipment. A warehouse pick comes from a warehouse shipment, can cover many orders, and is registered before the shipment is posted.
Can I use bins without directed put-away and pick?
Yes. With Bin Mandatory on, Business Central requires bin codes and suggests default bins. Since 2023 release wave 2 you can also use put-away templates and bin ranking without directed put-away and pick.
Can I turn off directed put-away and pick later?
Plan as if you cannot. Microsoft says a location’s configuration can be changed only while it has no item ledger entries, so pilot on a new location code.
How do I convert a location that already has inventory to use bins?
Clear negative inventory and open warehouse documents, then run the Create Warehouse Location batch job. It places stock in the adjustment bin, and a warehouse physical inventory moves it into real bins.
Sources
- Microsoft, Business Central pricing, no date shown, checked November 3, 2026. microsoft.com
- Microsoft Learn, Design Details: Warehouse Setup, February 28, 2023. learn.microsoft.com
- Microsoft Learn, Design Details: Inbound Warehouse Flow, September 29, 2023. learn.microsoft.com
- Microsoft Learn, Outbound warehouse processes, September 4, 2026. learn.microsoft.com
- Microsoft Learn, Set Up Items and Locations for Directed Put-away and Pick, August 21, 2025. learn.microsoft.com
- Microsoft Learn, Set Up Locations to Use Bins, May 18, 2026. learn.microsoft.com
- Microsoft Learn, Set up locations, August 22, 2025. learn.microsoft.com
- Microsoft Learn, Set Up Warehouse Employees, August 21, 2025. learn.microsoft.com
- Microsoft Learn, Set Up Bin Types, August 21, 2025. learn.microsoft.com
- Microsoft Learn, Create Bins, August 21, 2025. learn.microsoft.com
- Microsoft Learn, Set Up Put-away Templates, May 2, 2025. learn.microsoft.com
- Microsoft Learn, Put Items Away with Warehouse Put-aways, April 23, 2024. learn.microsoft.com
- Microsoft Learn, Receive Items with Warehouse Receipts, January 27, 2025. learn.microsoft.com
- Microsoft Learn, Pick Items for Warehouse Shipment, April 23, 2024. learn.microsoft.com
- Microsoft Learn, Convert Existing Locations to Warehouse Locations, February 28, 2023. learn.microsoft.com
- Microsoft Learn, Restructure Warehouses, August 21, 2025. learn.microsoft.com
- Microsoft release plan, Use directed pick and put-away suggestions in basic warehouse configurations, 2023 release wave 2, generally available October 2, 2023. learn.microsoft.com
- Stoneridge Software (Business Central partner), How to Set Up Advanced Warehousing in Business Central in 10 Easy Steps, May 14, 2025, updated January 22, 2026. stoneridgesoftware.com
- Tasklet Factory (sells Mobile WMS), Mobile WMS listing on Microsoft AppSource, no date shown. appsource.microsoft.com
- Insight Works (sells Warehouse Insight), Warehouse Insight: Essentials vs Premium licensing, April 21, 2026. dmsiworks.com
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
