Section · 6 guides

Shrinkage and write-offs

Loss, damage, expiry and obsolescence — measuring what disappears and deciding what to do about it.

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Shrinkage is discussed as theft and is usually mostly administrative: miscounts, unrecorded movements, receiving errors and damage nobody logged. Treating it all as loss both insults the team and misses the fix.

These guides separate the causes, put a number against each, and deal with the least comfortable category — stock that is present, accounted for, and never going to sell.

Shrinkage and write-offs8 min read

Measuring shrinkage before explaining it

Shrinkage is usually described as theft and is usually mostly paperwork.

When work happens away from the manager, visibility becomes a separate operational problem. For one approach to creating a remote activity record, see this guide.

For U.S. accounting context, IRS Publication 538 explains accounting methods and includes guidance relevant to inventories.

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Shrinkage and write-offs8 min read

The stock that is never going to sell

Obsolete stock is the least urgent problem in any storeroom and one of the most expensive.

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Shrinkage and write-offs7 min read

Rotation, and stock that expires while you hold it

First in, first out is a slogan until the newest delivery is put in front of the older one.

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Shrinkage and write-offs7 min read

What your stock is worth on paper

Stock value affects profit, tax and borrowing, and the method used is frequently whatever the software defaulted to.

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Shrinkage and write-offs6 min read

Stock used internally

Samples, demonstrations, repairs and staff purchases move stock without a sale, and are the quietest source of record drift.

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Shrinkage and write-offs7 min read

Investigating a loss without wrecking the team

A shrinkage investigation handled badly costs more in goodwill than the stock was worth.

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