Keeping reliable records
Shrinkage, write-offs, and honest reasons
One habit, choosing the right reason, decides whether four reports tell the truth.
On this page
One field, four reports
Every removal can carry a reason: sold, damaged, expired, internal use, lost, or other. It takes no extra time, because the form offers sold by default, and it decides how the removal is read everywhere else.
| Reason | Counts as demand | Counts as shrinkage | Can carry a sale price |
|---|---|---|---|
| Sold | Yes | No | Yes |
| Damaged | No | Yes | No |
| Expired | No | Yes | No |
| Lost | No | Yes | No |
| Internal use | No | No | No |
| Other | Yes | No | No |
| No reason recorded | Yes | No | No |
Tag a dropped case as damaged and it stays out of the demand rate, so it cannot inflate days of cover or the reorder point built on it. Leave it untagged and the app has to assume it sold.
What it looks like in the numbers
Six units of a product costing $4.00 are dropped and binned. Recorded as Damaged, that is $24.00 in the shrinkage report, no change to the demand rate, and no revenue anywhere.
Recorded as a sale with no price, the same six units become demand: the rate rises, days of cover falls, the suggested reorder point rises with it, and the sales report sets them aside as a removal it cannot value rather than folding them into revenue. Nothing warns you, because nothing about it is impossible; it is simply a different story than the one that happened.
The reports say how many removals in the window carry no reason and how many carry no price, so you can see how much of the picture is missing rather than quietly trusting an incomplete one.
Only counting finds what nobody wrote down
A write-off is stock somebody wrote off. The stock that vanishes without anyone noticing shows up only when you count, which is why Reports keeps a separate figure for what counting could not account for, measured across the counts in the window and valued at what the stock cost that day.
Two numbers moving in opposite directions is the interesting case: shrinkage near zero while counting keeps finding stock short means losses are happening that nobody is recording. Both near zero, with regular counts, is the state to aim for.
Reduce it where it happens
Shrinkage concentrates. Look at which products, which reasons, and which places recur, and use notes on the removals to say where the stock was. A pattern of expiries in one room is rotation; a pattern of losses in one product is usually picking, receiving, or theft.
Take-out baskets help here too: a basket carries one reason, one location, and one note for the lot, with any line overridable, so recording six write-offs properly is no slower than recording them badly.