Definition
Shrinkage
Shrinkage is the gap between the inventory your records say you have and what is physically there, caused by theft, damage, spoilage, miscounts and clerical errors.
Shrinkage is usually expressed as a percentage of sales. A stocktake measures it; only the discrepancy report tells you where it comes from. Recurring negative adjustments on the same few items are the signal to look at.
In Inventory Now
Every completed stocktake keeps a discrepancy report, so shrinkage by item and location is visible over time.
Discrepancy reportsRelated terms
