diff --git a/models/inventory/PurchaseReceipt.ts b/models/inventory/PurchaseReceipt.ts
index f835d2e9..6da16e02 100644
--- a/models/inventory/PurchaseReceipt.ts
+++ b/models/inventory/PurchaseReceipt.ts
@@ -2,16 +2,10 @@ import { ListViewSettings } from 'fyo/model/types';
 import { getTransactionStatusColumn } from 'models/helpers';
 import { PurchaseReceiptItem } from './PurchaseReceiptItem';
 import { StockTransfer } from './StockTransfer';
-import { createSerialNumbers } from './helpers';
 
 export class PurchaseReceipt extends StockTransfer {
   items?: PurchaseReceiptItem[];
 
-  override async afterSubmit(): Promise<void> {
-    await super.afterSubmit();
-    await createSerialNumbers(this);
-  }
-
   static getListViewSettings(): ListViewSettings {
     return {
       columns: [
diff --git a/models/inventory/StockMovement.ts b/models/inventory/StockMovement.ts
index 33a3a585..778fb478 100644
--- a/models/inventory/StockMovement.ts
+++ b/models/inventory/StockMovement.ts
@@ -1,5 +1,4 @@
 import { Fyo, t } from 'fyo';
-import type { Doc } from 'fyo/model/doc';
 import {
   Action,
   DefaultMap,
@@ -20,13 +19,13 @@ import { SerialNumber } from './SerialNumber';
 import { StockMovementItem } from './StockMovementItem';
 import { Transfer } from './Transfer';
 import {
-  createSerialNumbers,
+  canValidateSerialNumber,
   getSerialNumberFromDoc,
   updateSerialNumbers,
   validateBatch,
-  validateSerialNumber,
+  validateSerialNumber
 } from './helpers';
-import { MovementType, MovementTypeEnum, SerialNumberStatus } from './types';
+import { MovementType, MovementTypeEnum } from './types';
 
 export class StockMovement extends Transfer {
   name?: string;
@@ -66,7 +65,6 @@ export class StockMovement extends Transfer {
 
   async afterSubmit(): Promise<void> {
     await super.afterSubmit();
-    await createSerialNumbers(this);
     await updateSerialNumbers(this, false);
   }
 
@@ -147,7 +145,12 @@ export class StockMovement extends Transfer {
 }
 
 async function validateSerialNumberStatus(doc: StockMovement) {
-  for (const serialNumber of getSerialNumberFromDoc(doc)) {
+  for (const { serialNumber, item } of getSerialNumberFromDoc(doc)) {
+    const cannotValidate = !(await canValidateSerialNumber(item, serialNumber));
+    if (cannotValidate) {
+      continue;
+    }
+
     const snDoc = await doc.fyo.doc.getDoc(
       ModelNameEnum.SerialNumber,
       serialNumber
@@ -161,35 +164,26 @@ async function validateSerialNumberStatus(doc: StockMovement) {
 
     if (doc.movementType === 'MaterialReceipt' && status !== 'Inactive') {
       throw new ValidationError(
-        t`Active Serial Number ${serialNumber} cannot be used for Material Issue`
+        t`Non Inactive Serial Number ${serialNumber} cannot be used for Material Receipt`
       );
     }
 
     if (doc.movementType === 'MaterialIssue' && status !== 'Active') {
-      validateMaterialIssueSerialNumber(serialNumber, status);
       throw new ValidationError(
-        t`Inactive Serial Number ${serialNumber} cannot be used for Material Issue`
+        t`Non Active Serial Number ${serialNumber} cannot be used for Material Issue`
+      );
+    }
+
+    if (doc.movementType === 'MaterialTransfer' && status !== 'Active') {
+      throw new ValidationError(
+        t`Non Active Serial Number ${serialNumber} cannot be used for Material Transfer`
+      );
+    }
+
+    if (item.fromLocation && status !== 'Active') {
+      throw new ValidationError(
+        t`Non Active Serial Number ${serialNumber} cannot be used as Manufacture raw material`
       );
     }
   }
 }
-
-async function validateMaterialReceiptSerialNumber(
-  serialNumber: string,
-  status: string
-) {
-  if (status === 'Inactive') {
-    return;
-  }
-}
-
-async function validateMaterialIssueSerialNumber(
-  serialNumber: string,
-  status: SerialNumberStatus
-) {
-  if (status === 'Active') {
-    return;
-  }
-
-  throw new ValidationError(t`Serial Number ${serialNumber} is not Active.`);
-}
diff --git a/models/inventory/StockMovementItem.ts b/models/inventory/StockMovementItem.ts
index 7e8561a7..41f61c68 100644
--- a/models/inventory/StockMovementItem.ts
+++ b/models/inventory/StockMovementItem.ts
@@ -15,8 +15,9 @@ import { Money } from 'pesa';
 import { safeParseFloat } from 'utils/index';
 import { StockMovement } from './StockMovement';
 import { MovementTypeEnum } from './types';
+import { TransferItem } from './TransferItem';
 
-export class StockMovementItem extends Doc {
+export class StockMovementItem extends TransferItem {
   name?: string;
   item?: string;
   fromLocation?: string;
@@ -30,10 +31,12 @@ export class StockMovementItem extends Doc {
 
   rate?: Money;
   amount?: Money;
-  parentdoc?: StockMovement;
+
   batch?: string;
   serialNumber?: string;
 
+  parentdoc?: StockMovement;
+
   get isIssue() {
     return this.parentdoc?.movementType === MovementTypeEnum.MaterialIssue;
   }
diff --git a/models/inventory/StockTransfer.ts b/models/inventory/StockTransfer.ts
index bb8107bf..5ac81aa1 100644
--- a/models/inventory/StockTransfer.ts
+++ b/models/inventory/StockTransfer.ts
@@ -17,15 +17,16 @@ import { addItem, getLedgerLinkAction, getNumberSeries } from 'models/helpers';
 import { ModelNameEnum } from 'models/types';
 import { Money } from 'pesa';
 import { TargetField } from 'schemas/types';
+import { SerialNumber } from './SerialNumber';
 import { StockTransferItem } from './StockTransferItem';
 import { Transfer } from './Transfer';
 import {
+  canValidateSerialNumber,
   getSerialNumberFromDoc,
   updateSerialNumbers,
   validateBatch,
   validateSerialNumber,
 } from './helpers';
-import { SerialNumber } from './SerialNumber';
 
 export abstract class StockTransfer extends Transfer {
   name?: string;
@@ -311,7 +312,12 @@ export abstract class StockTransfer extends Transfer {
 }
 
 async function validateSerialNumberStatus(doc: StockTransfer) {
-  for (const serialNumber of getSerialNumberFromDoc(doc)) {
+  for (const { serialNumber, item } of getSerialNumberFromDoc(doc)) {
+    const cannotValidate = !(await canValidateSerialNumber(item, serialNumber));
+    if (cannotValidate) {
+      continue;
+    }
+
     const snDoc = await doc.fyo.doc.getDoc(
       ModelNameEnum.SerialNumber,
       serialNumber
diff --git a/models/inventory/StockTransferItem.ts b/models/inventory/StockTransferItem.ts
index f5524c62..c02c60cb 100644
--- a/models/inventory/StockTransferItem.ts
+++ b/models/inventory/StockTransferItem.ts
@@ -12,8 +12,9 @@ import { ModelNameEnum } from 'models/types';
 import { Money } from 'pesa';
 import { safeParseFloat } from 'utils/index';
 import { StockTransfer } from './StockTransfer';
+import { TransferItem } from './TransferItem';
 
-export class StockTransferItem extends Doc {
+export class StockTransferItem extends TransferItem {
   item?: string;
   location?: string;
 
@@ -25,8 +26,10 @@ export class StockTransferItem extends Doc {
 
   rate?: Money;
   amount?: Money;
+
   description?: string;
   hsnCode?: number;
+
   batch?: string;
   serialNumber?: string;
 
diff --git a/models/inventory/Transfer.ts b/models/inventory/Transfer.ts
index 375ab40a..567dfd45 100644
--- a/models/inventory/Transfer.ts
+++ b/models/inventory/Transfer.ts
@@ -1,9 +1,12 @@
 import { Transactional } from 'models/Transactional/Transactional';
 import { StockManager } from './StockManager';
-import { SMTransferDetails } from './types';
+import type { SMTransferDetails } from './types';
+import type { TransferItem } from './TransferItem';
+import { createSerialNumbers } from './helpers';
 
 export abstract class Transfer extends Transactional {
   date?: Date;
+  items?: TransferItem[];
 
   async beforeSubmit(): Promise<void> {
     await super.beforeSubmit();
@@ -13,6 +16,7 @@ export abstract class Transfer extends Transactional {
 
   async afterSubmit(): Promise<void> {
     await super.afterSubmit();
+    await createSerialNumbers(this);
     const transferDetails = this._getTransferDetails();
     await this._getStockManager().createTransfers(transferDetails);
   }
diff --git a/models/inventory/TransferItem.ts b/models/inventory/TransferItem.ts
new file mode 100644
index 00000000..c5ac5cd2
--- /dev/null
+++ b/models/inventory/TransferItem.ts
@@ -0,0 +1,21 @@
+import { Doc } from 'fyo/model/doc';
+import type { Transfer } from './Transfer';
+import type { Money } from 'pesa';
+
+export class TransferItem extends Doc {
+  item?: string;
+
+  unit?: string;
+  transferUnit?: string;
+  quantity?: number;
+  transferQuantity?: number;
+  unitConversionFactor?: number;
+
+  rate?: Money;
+  amount?: Money;
+
+  batch?: string;
+  serialNumber?: string;
+
+  parentdoc?: Transfer;
+}
diff --git a/models/inventory/helpers.ts b/models/inventory/helpers.ts
index 4403de09..6c6334a3 100644
--- a/models/inventory/helpers.ts
+++ b/models/inventory/helpers.ts
@@ -8,8 +8,9 @@ import type { StockMovement } from './StockMovement';
 import type { StockMovementItem } from './StockMovementItem';
 import type { StockTransfer } from './StockTransfer';
 import type { StockTransferItem } from './StockTransferItem';
+import { Transfer } from './Transfer';
+import { TransferItem } from './TransferItem';
 import type { SerialNumberStatus } from './types';
-import type { PurchaseReceipt } from './PurchaseReceipt';
 
 export async function validateBatch(
   doc: StockMovement | StockTransfer | Invoice
@@ -171,14 +172,17 @@ export function getSerialNumberFromDoc(doc: StockTransfer | StockMovement) {
   }
 
   return doc.items
-    .map((item) => getSerialNumbers(item.serialNumber ?? ''))
+    .map((item) =>
+      getSerialNumbers(item.serialNumber ?? '').map((serialNumber) => ({
+        serialNumber,
+        item,
+      }))
+    )
     .flat()
     .filter(Boolean);
 }
 
-export async function createSerialNumbers(
-  doc: PurchaseReceipt | StockMovement
-) {
+export async function createSerialNumbers(doc: Transfer) {
   const items = doc.items ?? [];
   const serialNumberCreateList = items
     .map((item) => {
@@ -208,7 +212,7 @@ export async function createSerialNumbers(
   }
 }
 
-function isSerialNumberIncoming(item: StockTransferItem | StockMovementItem) {
+function isSerialNumberIncoming(item: TransferItem) {
   if (item.parentdoc?.schemaName === ModelNameEnum.Shipment) {
     return false;
   }
@@ -220,6 +224,17 @@ function isSerialNumberIncoming(item: StockTransferItem | StockMovementItem) {
   return !!item.toLocation && !item.fromLocation;
 }
 
+export async function canValidateSerialNumber(
+  item: StockTransferItem | StockMovementItem,
+  serialNumber: string
+) {
+  if (!isSerialNumberIncoming(item)) {
+    return true;
+  }
+
+  return await item.fyo.db.exists(ModelNameEnum.SerialNumber, serialNumber);
+}
+
 export async function updateSerialNumbers(
   doc: StockTransfer | StockMovement,
   isCancel: boolean
diff --git a/schemas/app/inventory/SerialNumber.json b/schemas/app/inventory/SerialNumber.json
index 4516673e..cf8ecf09 100644
--- a/schemas/app/inventory/SerialNumber.json
+++ b/schemas/app/inventory/SerialNumber.json
@@ -29,6 +29,7 @@
       "label": "Status",
       "fieldtype": "Select",
       "default": "Inactive",
+      "readOnly": true,
       "options": [
         {
           "value": "Inactive",