What are inventory adjustments?

Point of Sale (POS) Glossary

Inventory Adjustments are increases and decreases made in a point of sale system to accommodate for known instances of breakage, theft, waste or item expiration, internal use, stock movement to a different location, shipment errors, and various write-offs. These adjustments in a POS system return recorded inventory counts to accurate levels.

Inventory Adjustments may also be made after stock reconciliation to account for unknown circumstances when a POS stock count differs from the audit. If the POS system does not do real-time inventory tracking and relies on manual stock counts, it requires periodic Inventory Adjustments to maintain accurate counts.

Incorrect inventory counts affect the cost of goods calculation, reordering schedule, and overall accounting. Inventory Adjustments are an essential tool to help keep stock numbers accurate.