How to plan receipt flow

The buy is a number; the flow is the outcome

Most planning attention goes to the total: how much to buy, at what margin, across how many options. That attention is well placed — the total is the largest single commitment a merchandising team makes. But the total is only half a decision. Inventory that exists is not inventory that sells; it has to exist in the weeks when demand does.

A season has a fixed number of full-price trading weeks, and every week a receipt is late removes one of them from the front and adds one to the clearance at the end. That trade is not symmetrical. A week of full-price selling and a week of clearance selling are not the same week wearing different labels — one earns initial markup, the other spends it. Which is why delivery timing is a margin control rather than a logistics metric, and why it belongs in the plan rather than in the follow-up.

The flow is also the only part of the plan that stays negotiable. The sales forecast is an estimate you cannot change by wanting to; the markdown plan is largely a consequence of the first two. Receipts are the one line where a decision taken in week four still changes the outcome in week fourteen. That makes the receipt plan the primary instrument of in-season control, and it is worth building it as something you intend to change rather than as a schedule you hope to hold.

Seven steps, in order

Each step consumes the output of the one before it. The two most often skipped — converting period dollars into dated deliveries, and reserving for chase — are the two that decide whether the plan survives contact with the season.

1. 1

   Start from the sales and markdown plan, phased

   Receipt flow is downstream of demand. Phase the sales plan and the markdown plan across the periods of the season first — on the retail calendar, restated for any holiday shift or 53rd week — because every receipt figure is derived from them.

2. 2

   Set an inventory target for each period end

   Convert each period into an end-of-period inventory target using a stock-to-sales ratio or a weeks-of-supply target. The ratio should fall as the season progresses: high cover going into peak, low cover at the exit. A flat ratio across a season is the single most common cause of an end-of-season overhang.

3. 3

   Solve receipts from the inventory identity

   Receipts for a period equal planned EOP plus planned sales plus planned markdowns plus shrink, less BOP. Never enter a receipt figure directly. A typed receipt hides an unstated assumption about one of the other four lines.

4. 4

   Convert receipt dollars into in-store dates

   A receipt plan expressed in months is not yet actionable. Translate each period figure into specific in-store dates for specific deliveries, then work backwards through the T&A calendar to the ship, production and PO dates that would have to hold.

5. 5

   Reserve a share of receipts for chase

   Deliberately leave part of the receipt plan uncommitted in the back half of the season. An unreserved plan is fully committed before the first week of sales data exists, which means no early signal can change anything.

6. 6

   Stress the flow against a slip

   Move the largest receipt three weeks later and re-read the inventory line. If cover breaks in a peak period, the flow is too dependent on one delivery landing on time and should be split before the order is placed rather than expedited after it slips.

7. 7

   Rephase on every material change

   When a delivery slips, sales run above or below plan, or a style is cut, re-solve the remaining receipts from the same identity rather than adjusting the affected period alone. A receipt plan patched period by period stops reconciling to the season total within about two changes.

Solving a six-month flow

One class, a six-month season, in thousands of retail dollars. Sales are phased to peak in month four. The stock-to-sales ratio starts at 2.9 and falls to 1.8, so inventory tightens as the exit approaches. Opening stock is 520 and the season is planned to carry out 150.

Shrink is carried at 0.5% of sales and is included in the solved receipt figures; it is not shown as a separate row to keep the grid readable.

Work month three to see the mechanism. Planned closing stock is 580, planned sales 300, planned markdowns 10, shrink 1.5 at half a percent of sales, and opening stock 600. So receipts are 580 + 300 + 10 + 1.5 − 600, which is 291.5, shown as 292. Nobody decided that figure — it is what the sales plan and the inventory target jointly require. That is the whole point: change the stock-to-sales target for month three and the receipt figure moves on its own, which is exactly the behaviour you want from a plan.

Read the receipt row across and the shape is unmistakable: 221, 281, 292, 252, 166, 71. Receipts peak in month three, one month ahead of the sales peak in month four, then fall away steeply. That lead is not a preference, it is arithmetic — inventory has to be in the building before the week it sells, so the receipt curve always leads the sales curve by roughly the cover you intend to hold.

The steep fall at the end is what a clean exit looks like on paper. Month six receives 71 against 180 of sales and 70 of markdown, deliberately drawing the inventory down to 150. A receipt plan that does not fall faster than the sales plan at the end of a season has an overhang built into it, and no amount of in-season trading will remove inventory that was scheduled to arrive.

From period dollars to in-store dates

A monthly receipt figure is a planning number, not an instruction. Nobody can execute “292 in month three”. Turning it into something executable means answering three questions: how many deliveries, on what dates, and against which purchase orders.

The date that belongs in the plan is the in-store date — when goods are received, checked, allocated and sellable. It is not the purchase order date, not the vendor ship date, and not the port arrival date. Each of those sits earlier by a lead time that has to be written down somewhere, and the place it gets written down is the T&A calendar, working backwards from the in-store date through received, in transit, shipped, produced and ordered. The receipt plan and the T&A calendar are the same schedule read from opposite ends.

The second question — how many deliveries — is where most monthly plans quietly break. A single drop per period produces a sawtooth inventory position: heavy the week it lands, thin the week before the next one. The monthly grid hides this completely, because the month-end balance is correct and the shortage happened in week three. Splitting a period into two or three dated deliveries costs a little handling and removes the thin weeks that a monthly view cannot show you.

The third question is about traceability rather than planning: each dated delivery should map to specific purchase orders, so that when a PO moves the plan knows which period changed. Without that mapping a slipped delivery is a conversation; with it, a slipped delivery is a recalculated plan. You can check the arithmetic on a single period against the open-to-buy calculator, and lead-time reliability by vendor against the lead time and OTD calculator.

Leaving something to decide with

A receipt plan committed in full before the season starts is a plan that cannot learn. The first weeks of sell-through are the highest-quality demand information the season will produce — actual customers, actual prices, actual sizes — and a fully placed plan cannot act on any of it.

The reserve should be sized by the constraint rather than by a percentage rule. The binding question is whether a reorder placed when the signal arrives can still land inside the selling window. If replenishment takes ten weeks and the signal arrives in week six of a sixteen-week window, the goods land with no trading weeks left and the reserve was never spendable — in which case holding it back simply starved the front of the season. If the same brand can reorder a core fabric in four weeks, the reserve is real and worth protecting.

That is why chase capacity is a sourcing decision as much as a planning one. Fabric held at the mill, a nominated supplier with reserved capacity, or a domestic option at a worse cost price all convert an unusable reserve into a usable one. It is also why the reserve should sit against the styles most likely to need it — proven carryover and core, where a reorder is low-risk — rather than being spread evenly across a range where half of it could never be placed in time.

The escalation ladder

Deliveries slip. The question is never whether but what to do in the week you find out, and the levers expire in cost order — the cheap ones first.

The decision variable at the bottom of the ladder is worth stating plainly: once a receipt would land carrying more weeks of cover than there are trading weeks left in the window, the surplus will clear at a discount whatever anyone does about it. At that point the only remaining choice is whether the markdown is planned and shallow or unplanned and deep. You can size that trade-off with the break-even markdown calculator.

Six ways a receipt plan balances and is still wrong

Where the plan goes stale

Everything above assumes the receipt plan reflects current delivery dates. In a spreadsheet it does not, and the reason is structural rather than careless: the receipt plan lives in one file, the purchase orders live in a system, and the vendor confirmations live in email. The plan is only as current as the last time someone reconciled the three by hand.

That is what makes a stale receipt row so expensive relative to its cause. A single delivery that moved three weeks ago makes every downstream inventory, cover and open-to-buy figure wrong — quietly, with no error state, in a grid that still adds up. When the receipt plan, the purchase orders and the weekly stock position sit on one data model, a re-dated PO moves the receipt row and the inventory line the same day, and the escalation ladder is climbed while the cheap levers are still available rather than after they expire.

• ✓Solve receipts from the identity — closing stock + sales + markdowns + shrink − opening stock. A typed receipt figure hides an unstated assumption.
• ✓The receipt curve leads the sales curve by roughly the cover you intend to hold; it must also fall faster than sales at the season exit or an overhang is built in.
• ✓Plan on the in-store date, never the order or ship date, and split each period into more than one dated delivery so the thin weeks a monthly grid hides do not happen.
• ✓Size the chase reserve by whether a reorder can land inside the remaining window, not by a percentage rule — an unspendable reserve just starves the front of the season.
• ✓When a delivery slips, work the ladder in cost order and act the week you find out; the cheap levers expire first.
• ✓Re-solve the whole remaining season on every material change, not just the period that moved.

• How to set open-to-buy — the budget the flow spends →
• How to read a WSSI — the weekly view the flow is traded against →
• How to build a T&A calendar — backward-planning the in-store date →
• Open-to-buy calculator — check a single period →
• Weeks of supply calculator — cover for a period →
• Stock-to-sales ratio calculator — set the inventory target →
• Lead time & OTD calculator — vendor delivery reliability →
• Free WSSI template — 13-week worksheet →

Frequently asked questions

What is receipt flow planning?

Receipt flow planning is deciding how much inventory lands in each period of a season, and when. It converts a seasonal buy into a dated schedule of deliveries that keeps inventory high enough to cover demand through peak and low enough to exit the season clean. The receipt figure for each period is solved from the inventory identity rather than estimated: planned ending inventory plus planned sales plus planned markdowns plus shrink, less beginning inventory.

How do you calculate a receipt plan?

Rearrange the inventory identity. Beginning inventory plus receipts, less sales, markdowns and shrink, equals ending inventory — so receipts equal ending inventory plus sales plus markdowns plus shrink, less beginning inventory. Set the ending inventory target for each period from a stock-to-sales or weeks-of-supply target, phase the sales and markdown plans, and the receipt figure for every period falls out. If a receipt number was typed rather than derived, one of the other four lines carries an assumption nobody has stated.

What is the difference between a receipt plan and open-to-buy?

The receipt plan says how much inventory should land in each period. Open-to-buy is what remains of that plan after subtracting what has already been ordered and received. The receipt plan is the schedule; open-to-buy is the balance still available against it. A negative open-to-buy means the receipt plan for that period is already over-committed.

Should receipts be planned on the order date or the in-store date?

The in-store date — the point at which goods are received, checked and sellable. Planning on the order date or the ship date builds a plan in which inventory appears weeks before it can be sold, which makes every downstream cover and stock-to-sales figure optimistic. The order date belongs in the T&A calendar as a backward-derived milestone, not in the receipt plan as the receipt date.

How much of the receipt plan should be held back for chase?

There is no universal figure, and any specific percentage would be a made-up benchmark. The useful way to size it is by the constraint rather than by a rule of thumb: the reserve should be at least as large as what a reorder can realistically deliver inside the remaining selling window, given the replenishment lead time. If the lead time is longer than the trading weeks left when the signal arrives, the reserve cannot be spent and holding it back costs the season inventory it needed at the front.

How often should the receipt plan be rephased?

On every material change — a slipped delivery, a sales run rate that has diverged from plan, a cut style — and on the regular reforecast cadence regardless, which for most seasonal brands means monthly and weekly in season for direct channels. The test is whether a receipt can still move. Once every remaining delivery is committed to production, rephasing produces a more accurate document rather than a different outcome.

What happens to the receipt plan when a delivery slips?

Work down the levers in cost order: pull the receipt forward if the goods are finished, split it if part of the order is ready, rephase the downstream receipts if the slip is unavoidable, cancel or reduce if the delivery would land with fewer trading weeks left than its weeks of cover, and only then accept it and plan the markdown as a dated exit. What matters most is doing this immediately, because the number of available levers shrinks every week and the cheap ones expire first.

How does receipt flow differ between wholesale and DTC?

In wholesale the flow is largely dictated by the customer ship window, so the receipt plan is a production and delivery commitment with little in-season flexibility, and the risk is cancellation or chargebacks on late shipment rather than overstock. In DTC the brand owns the calendar, so receipts can be split into more, smaller deliveries and a genuine chase reserve is possible. Brands running both should plan the flows separately and consolidate, since blending a fixed commitment with a flexible one produces a schedule that describes neither.