Stock Adjustment

Stock Adjustment is the mechanism to reconcile system stock quantities with the actual physical inventory count. Discrepancies can arise from various causes — counting errors during prior receipts, physical damage, theft, spoilage, evaporation, or unrecorded informal movements. The adjustment note provides a controlled, auditable way to correct these differences.

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Adjustments can increase stock (e.g., materials found during stock-take that weren't recorded) or decrease stock (e.g., damaged goods, losses). Every adjustment requires a mandatory reason and goes through an approval workflow before the stock records are modified.

Navigation: Main Menu → Logistics → Stock Adjustment

Adjustment Workflow

Adjustment List View

Toolbar Actions

Button	Action
Add Adjustment Note	Create a new stock adjustment.

Step-by-Step: Creating a Stock Adjustment

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Step 1: Conduct a Physical Stock Count

Before creating an adjustment, perform a physical inventory count at the warehouse. Compare the physical quantities against the system's stock-on-hand report (available in Analytics → SCM or the Logistics landing page "View Stock" search).

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Document all variances — materials where the physical count differs from the system quantity.

Step 2: Click "Add Adjustment Note"

Navigate to Logistics → Stock Adjustment and click Add Adjustment Note.

Step 3: Fill in the Adjustment Header

Field	Required	Description
Adjustment Code	Auto	System-generated reference code.
Adjustment Date	Yes	Date of the stock count / adjustment.
Warehouse	Yes	The warehouse where the stock count was performed.
Job	Yes	The job associated with this warehouse.
Adjustment Type	Yes	Increase (Stock In) or Decrease (Stock Out).
Reason	Yes	Mandatory explanation: e.g., "Annual stock-take variance", "Damaged by rain", "Theft reported", "Material found in alternate location".

Step 4: Add Material Lines

For each material with a variance, add a line item specifying:

Material — Select from the material master.
Lot — For decreases, select the specific lot to reduce. For increases, a new lot may be created.
Adjustment Quantity — The quantity to add (increase) or remove (decrease).
Rate — The valuation rate for the adjustment (usually the last receipt rate or weighted average).

Step 5: Save and Submit for Approval

Save the adjustment in Draft status, review the totals, then click Request Approval. Upon approval:

For Increases: Positive stock transactions are posted, adding to the stock-on-hand. New lots may be created.
For Decreases: Negative stock transactions are posted, reducing the stock-on-hand from specified lots.
A finance voucher is generated recording the gain (for increases) or loss (for decreases) in the appropriate accounts.

Common Adjustment Reasons

Direction	Reason	Example
Increase	Material found	Materials discovered during stock-take that weren't recorded in the system.
Increase	Correction of prior error	An earlier MRN recorded wrong quantities; correction needed.
Decrease	Damage	Materials damaged by weather, accident, or improper storage.
Decrease	Spoilage / Expiry	Perishable materials that have expired or deteriorated.
Decrease	Theft / Loss	Materials confirmed missing after investigation.
Decrease	Evaporation / Shrinkage	Liquids or bulk materials that naturally reduce in quantity over time.

Tips & Best Practices

Regular stock-takes: Conduct physical stock counts monthly or quarterly. Frequent small adjustments are easier to investigate and approve than large year-end corrections.

Separate notes per direction: Create separate adjustment notes for increases and decreases. This makes the approval process clearer and the audit trail easier to follow.

Do not use adjustment to correct process errors: If materials were issued in error, use Issue Return instead. If an MRN has wrong quantities, the MRN should be reversed through proper channels. Stock Adjustment is specifically for reconciling physical vs. system differences.