Glossary
What is a stock adjustment?
What a stock adjustment is, when you need one, and what it does to quantities and the books.
Updated
In short
A stock adjustment corrects the recorded quantity of a product to match what is on the shelf. In SimpleERP an adjustment carries a reason, works out the difference from a count, and posts its value to the ledger.
A stock adjustment is a document that corrects the recorded quantity of a product to match the shelf, after a physical count or when goods are damaged, lost or found. It records the reason, changes quantity in a warehouse, and posts the value of the change to the books, so the gap between system and shelf has an explanation instead of an overwritten number.
Stock adjustment: a worked example
Lakshmi Steel counts the Main godown on a Saturday. Two racks were damaged in loading and one LED panel turns up behind a pallet.
| Product | System qty | Counted | Difference | Unit cost | Value |
|---|---|---|---|---|---|
| Steel rack 4 shelf | 32 | 30 | −2 | ₹3,170 | −₹6,340 |
| LED panel 2×2 | 170 | 171 | +1 | ₹1,145.60 | +₹1,145.60 |
| Cable tray 3 m | 150 | 150 | 0 | Not posted |
FAQ
Questions, answered
When should I post a stock adjustment?
After a physical count, when goods are damaged, expire, are lost or stolen, or turn up unexpectedly. Also when you start using the software, to bring in opening stock. Anything that changes stock without a purchase, sale or transfer is an adjustment.
What does a stock adjustment do to the accounts?
Stock lost or damaged leaves inventory at average cost and is charged to a stock adjustment account, which reduces profit. Stock found comes back in at a cost you enter and credits the same account. Opening stock is credited to opening balance equity instead.
Why not just edit the stock number?
Because nobody could later tell why it changed. In SimpleERP stock changes only through posted documents, so every unit has a reason, a date and a person behind it, and the stock value always agrees with the inventory account.
What if stock moves while I am counting?
SimpleERP takes the system quantity when you save and checks it again when you post. If a sale went out in between, it recalculates the difference and asks you to confirm, so you do not double-count that sale.
Related
Keep reading
Dead stock
Goods with no sales for months that are unlikely to sell at full price, tying up cash and godown space.
Read moreNegative stock
Records showing less than zero of a product because more was issued than received, usually a bill entered late.
Read moreInventory
Stock on hand by warehouse at weighted average cost, with a movement ledger and a low-stock list.
Read more
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