An inventory adjustment corrects a discrepancy between what your system says you have and what is physically in your warehouse. Adjustments are a normal part of warehouse operations — they account for damage, shrinkage, counting errors, expiry, and other real-world events.
Adjustment Types
Each adjustment is categorized by the reason for the correction:
| Type | When to use it |
|---|---|
| Cycle count | Discrepancies found during a scheduled cycle count. |
| Physical inventory | Corrections from a full warehouse-wide physical count. |
| Damage | Items damaged in storage, during handling, or in transit. |
| Shrinkage | Unexplained inventory loss (packaging errors, unrecorded breakage, minor discrepancies). |
| Obsolete | Items that are no longer sellable or usable and should be written off. |
| Correction | A manual fix for a data entry error or system issue. |
| Found | Items discovered that were not previously recorded (e.g., found during reorganization). |
| Expired | Items that have passed their expiry date and must be removed from available stock. |
| Theft | Confirmed inventory theft. |
| Return to supplier | Items being sent back to the supplier (e.g., defective goods). |
Adjustment Lifecycle
Adjustments follow an approval workflow to ensure accountability:
DRAFT --> PENDING APPROVAL --> APPROVED --> POSTED
\-> CANCELLED| Status | What it means |
|---|---|
| Draft | The adjustment is being prepared. Line items and quantities can still be edited. |
| Pending approval | The adjustment has been submitted and is waiting for a manager or supervisor to review it. |
| Approved | A manager has reviewed and approved the adjustment. |
| Posted | The adjustment has been applied to stock levels. This is final — stock quantities are updated and a stock journal entry is recorded. |
| Cancelled | The adjustment was cancelled. No changes to stock. |
The road at the bottom of an adjustment’s page walks these four steps from left to right: the ones already passed are ticked, the one the adjustment is at is filled, and the next one is a button — every move is yours to make. Rest on a step to see when it was reached and by whom. Clicking the step it is at opens the map instead: every status with an arrow for each move, the ones you can reach from here clickable. Cancelled hangs off the step the correction left from, and there is nothing after Posted — once the stock has moved, a mistake is put right by a second adjustment rather than undone.
Creating an Adjustment
- Go to Adjustments in the sidebar under Inventory and click New.
- Fill in:
- Adjustment number — a unique reference (e.g.,
ADJ-2026-001). - Warehouse — the warehouse where the adjustment applies.
- Adjustment Type — the reason for the correction (damage, shrinkage, cycle count, etc.).
- Adjustment Date — the date of the correction.
- Reference Number — an optional external reference.
- Reason — a description of why the adjustment is needed.
- Adjustment number — a unique reference (e.g.,
- Save the adjustment in Draft status. Its details are on the left of the page and its Lines are beside them on the right.
- Add a line for each item being corrected, then submit it for approval when ready.
The Adjustments list searches by number, reference or reason, and its filter button narrows it by Type, Status — the drafts still to submit, the ones awaiting approval — Warehouse, an Adjustment date range, or a band of Lines or Cost impact (see Working with lists).
Adjustment Lines
The lines sit beside the adjustment’s details, and can be written while it is still a draft. Each one is a specific item being corrected:
- Expected Quantity — what the system says you should have.
- Actual Quantity — what was physically counted or observed.
- Adjustment Quantity — the difference (calculated automatically).
- Variance Percentage — how far off the count was from expectations.
- Reason Code — a specific reason for this particular line’s discrepancy.
- Cost impact — what the correction is worth in all.
Approval Workflow
Adjustments require approval before they affect stock levels. This prevents unauthorized changes and creates an accountability chain:
- The warehouse worker writes the adjustment and clicks Pending approval, the next step on the road at the bottom of the page. The configured workflow picks the right approvers — there is no need to choose them by hand.
- The decision is routed to the assigned approver’s Inbox, where they review the adjustment, its line items, and the stated reason.
- The approver can approve, reject (with a required reason), or delegate the decision to another user.
- Once all required approvers sign off, the last step on the road is Posted — clicking it updates stock levels and writes a permanent stock journal entry.
The full chain of decisions, including any rejections and the reasons given, is kept permanently on the adjustment for audit purposes.
Tip: For high-value adjustments (e.g., above 50,000 DA), set up a workflow with a second level of approval. Approval workflows route differently based on threshold amounts so high-impact corrections automatically get extra scrutiny.