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Inventory Adjustments

Inventory adjustments are used to increase or decrease item quantities and cost basis in Racko to account for discrepancies between physical inventory and system records. These discrepancies may arise due to various reasons such as spoilage, theft, loss, or errors in receiving items.

When to Use Adjustments​

Use inventory adjustments sparingly. Most inventory changes should occur through regular item receipts and shipments. However, if you encounter a situation where your physical inventory count doesn't match the system records:

  1. First, investigate the discrepancy by reviewing the item's transaction history.
  2. Check for incorrectly entered or missed transactions.
  3. If the discrepancy persists, an inventory adjustment may be necessary.

Creating an Adjustment​

To create a new inventory adjustment:

  1. Navigate to Inventory > Adjustment in the main menu.

  2. Click on Add New on the top right.

  3. Fill out the adjustment form with the following information:

    • Date: The date of the adjustment
    • Reason: Brief explanation for the adjustment
    • Location: Where the adjustment is taking place
    • Adjustment Account: The account to which the adjustment should be posted

  4. For each item being adjusted:

    • Select the Item
    • The Current Quantity will be displayed
    • Enter either the New Quantity or the Quantity Change
    • Optionally adjust the Cost Basis

  5. Add any additional notes or comments

  6. Click Save to process the adjustment

Adjusting Quantity and Cost Basis​

  • When adjusting quantity, you can enter either the new total quantity or the change in quantity.
  • Cost basis adjustments allow you to modify the total value of the item in inventory.
  • For increases in quantity, the system will suggest a cost based on the item's standard cost.
  • For decreases, the suggested cost will be based on your chosen valuation method (FIFO, LIFO, or Weighted Average).

Adjustment Accounts​

Specify a default adjustment account in Settings > General Settings. This account is used for bulk edits and when no specific account is chosen. Common accounts include:

  • Inventory Shrinkage: For general adjustments
  • Opening Balance Equity: When adding initial inventory

Best Practices​

  1. Use adjustments as a last resort after thorough investigation.
  2. Document the reason for each adjustment for auditing purposes.
  3. Regularly perform cycle counts to minimize large discrepancies.
  4. Review adjustment reports periodically to identify recurring issues.

For more detailed information on managing inventory adjustments, please refer to the specific sections in this documentation.