Adjustment Reasons

Adjustment Reasons

Adjustment reasons in EquiBillBook help you document why stock adjustments are made, maintain proper audit trails, and analyze inventory patterns. This guide explains how to use and manage adjustment reasons effectively.

What are Adjustment Reasons?

Adjustment reasons are predefined categories that explain why stock levels are being adjusted. They serve multiple purposes:

• Documentation: Provide clear explanation for each adjustment
• Audit Trail: Maintain compliance records for inventory changes
• Analysis: Identify patterns and trends in stock adjustments
• Reporting: Generate reports by reason type for insights
• Control: Track specific types of adjustments separately

Common Adjustment Reasons

Typical adjustment reasons include:

Inventory Count Related

• Physical Count Variance: Difference found during physical inventory count
• Cycle Count Adjustment: Adjustment from regular cycle counting
• Year-End Count: Annual physical inventory count adjustments

Damage and Loss

• Damaged Goods: Items damaged during handling or storage
• Loss/Theft: Stock lost or stolen
• Pilferage: Theft or unauthorized removal
• Breakage: Items broken during handling

Quality and Expiry

• Expired Items: Products past expiration date
• Quality Rejection: Items failing quality inspection
• Obsolete Stock: Items no longer usable or sellable
• Defective Items: Items with manufacturing defects

Operational

• Sample/Free Issue: Items given away for samples or promotions
• Internal Consumption: Stock used internally (not through sales)
• Production Use: Raw materials used in production
• R&D Consumption: Items used for research and development

Data and Documentation

• Data Correction: Correcting previous data entry errors
• Found Stock: Previously missing stock discovered
• Documentation Error: Correction due to documentation issues
• System Error Correction: Fixing system-generated errors

Returns and Receipts

• Return Without Invoice: Items returned but not linked to invoice
• Free Stock Received: Items received without purchase bill
• Gift Received: Items received as gifts

Selecting Adjustment Reasons

When creating a stock adjustment:

1. After selecting an item and entering adjustment quantity
2. Look for the "Adjustment Reason" dropdown field
3. Select the most appropriate reason from the list
4. If no exact match, choose the closest category
5. Add detailed notes in the notes field for clarification

Configuring Adjustment Reasons

To customize adjustment reasons (if available in your system):

1. Navigate to Settings → Item Settings or Inventory Settings
2. Look for "Stock Adjustment Reasons" or "Adjustment Reason Codes"
3. View existing reasons
4. Add new reasons specific to your business needs
5. Edit or deactivate reasons as needed
6. Save the configuration

Best Practices for Using Reasons

• Be Specific: Choose the most accurate reason available
• Add Notes: Provide additional context in notes field
• Consistency: Use the same reason for similar situations
• Accuracy: Don't use generic reasons when specific ones exist
• Training: Train staff on proper reason selection

Analyzing Adjustment Reasons

Use adjustment reasons for business insights:

• Pattern Identification: Identify recurring issues (e.g., frequent damage)
• Root Cause Analysis: Understand why adjustments are needed
• Process Improvement: Use data to improve inventory processes
• Loss Prevention: Track theft or loss patterns
• Quality Control: Monitor quality-related adjustments

Reporting by Adjustment Reason

Generate reports filtered by reason:

• By Reason Type: See all adjustments for a specific reason
• Trend Analysis: Track reason frequency over time
• Value Impact: Understand financial impact of each reason type
• Location Comparison: Compare reasons across branches

Audit and Compliance

Adjustment reasons support compliance:

• Documentation: Provide required documentation for audits
• Traceability: Maintain clear trail of all inventory changes
• Justification: Support business decisions with documented reasons
• Regulatory Compliance: Meet industry-specific requirements

Example Scenarios

Scenario 1: Physical Count Variance

• Situation: Physical count shows 10 more units than system
• Reason: "Physical Count Variance" or "Found Stock"
• Notes: "Discrepancy found during monthly cycle count on [date]"

Scenario 2: Expired Products

• Situation: 25 units past expiration date need removal
• Reason: "Expired Items"
• Notes: "Items expired on [date], removed from inventory"

Scenario 3: Damage During Transportation

• Situation: 5 units damaged during delivery
• Reason: "Damaged Goods"
• Notes: "Damage occurred during transportation, items not sellable"

Scenario 4: Free Samples to Customer

• Situation: 50 units given as free samples
• Reason: "Sample/Free Issue"
• Notes: "Promotional samples provided to [customer name]"

Custom Reason Codes

If your business needs specific reasons:

• Work with your system administrator to add custom reasons
• Create reason codes that align with your business processes
• Ensure reason codes are clear and unambiguous
• Regularly review and update reason codes as needed

Importance of Accurate Reasons

Using accurate adjustment reasons helps:

• Identify recurring inventory issues
• Improve inventory management processes
• Reduce unnecessary adjustments
• Support business decision-making
• Maintain regulatory compliance
• Improve inventory accuracy over time

Need Help?

If you have questions about adjustment reasons:

• Check system documentation for available reasons
• Contact your administrator to add custom reasons
• Review adjustment reports to see how reasons are used
• Train staff on selecting appropriate reasons
• Contact support if reason selection is not working properly

Proper use of adjustment reasons is essential for maintaining accurate inventory records and gaining valuable insights into inventory management. Always select the most appropriate reason and supplement with detailed notes when necessary.