Accounting for Shrinkage
<< Click to Display Table of Contents >> Navigation: Inventory > Accounting for Shrinkage |
To account for shrinkage in your inventory you should:
1. | Create a vendor for your business or store if you have not already done so. |
2. | Create a purchase order. |
3. | Name the purchase order something that identifies it with its functions (Shrink, Wear, Error, etc.) |
4. | Associate the vendor for your business or store with the purchase order. |
5. | Add the items to the purchase order with negative quantities. |
6. | Receive the purchase order items. |
7. | Update Inventory. |
This will remove the items from your inventory and place them on the purchase order. This will allow you to track changes in inventory quantities that are not associated with vendors receiving or sales. You can continue to add to this purchase order as long as you like.
Shrinkage is the loss rate of products between point of manufacture and point of sale. This can be due to employee theft, shoplifting, administrative & paperwork errors, vendor fraud, etc.