Inventory adjustments are a necessary part of managing inventory levels. They allow businesses to account for discrepancies between the physical count and the book count of inventory items. Adjustments can be made for a variety of reasons, including damaged or lost items, theft, inaccurate counts, and price changes.
The first step in doing an inventory adjustment is to identify the reason for the discrepancy. Once the reason is known, the appropriate action can be taken to correct the problem. If items are damaged or lost, they should be removed from the inventory records. If theft is suspected, an investigation should be conducted and proper documentation filed. Inaccurate counts can often be corrected by simply taking a new count of the affected items. Price changes should also be documented and reflected in the updated records.
Once all of the relevant information has been gathered, it is time to make the actual adjustment to the inventory records. This is typically done by entering a negative quantity for items that have been removed from stock (damaged, lost, stolen) and/or entering a positive quantity for items that have been added to stock (new arrivals, price changes). The final step is to update any reports or systems that useinventory data so that they reflectthe accurate quantities on hand.