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Adjustments

Adjustments

Lekha’s Inventory Adjustment feature makes it effortless to correct stock discrepancies due to damage, loss, audit corrections, or manual entry errors. Users can quickly specify reasons for adjustment, select affected items, and modify quantities—all while maintaining a clear audit trail.

With support for reference dates, item-level pricing, and adjustment notes, this tool ensures your stock records stay accurate and compliant, reinforcing trust in inventory-driven reports, tax filings, and operational planning.

Creating an Adjustment

Inventory adjustments help you correct stock discrepancies and maintain accurate inventory records. Once created, adjustments cannot be edited, so ensure all information is correct before saving.

Step 1: Access the Adjustments Section

  1. Navigate to Inventory in the main menu
  2. Click on Adjustments from the submenu
  3. You’ll see the adjustments list page

Step 2: Create New Adjustment

  1. Click the "+ New" button
  2. An adjustment creation form will appear

Step 3: Fill in Adjustment Details

Basic Information

Reason (Required)

  • Select the reason for this inventory adjustment
  • Common reasons include:
    • “Old stock found” - Previously unknown stock discovered
    • “Items damaged” - Stock damaged and unusable
    • “Items lost” - Stock lost or stolen
    • “Audit correction” - Discrepancies found during stock audit
    • “Manual entry error” - Correcting previous data entry mistakes
  • Custom reasons can be added through reason management
  • This field is mandatory for audit trail purposes

Reference (Optional)

  • Enter any reference number or code for this adjustment
  • Examples: “AUDIT-2024-001”, “INS-CLAIM-456”, “MGR-APPROVAL-789”
  • Helps in cross-referencing with external documents
  • Leave blank if not applicable

Date (Required)

  • Select the date when the adjustment occurred
  • Default is current date
  • Can be changed to reflect the actual adjustment date
  • Important for accurate inventory reporting

Items to Adjust

Item (Required)

  • Select the item whose inventory needs adjustment
  • Only items with inventory tracking enabled will appear
  • Search by item name, SKU, or brand for quick selection

Quantity to be Added (Required)

  • Enter the quantity change for this item
  • Positive numbers: Increase inventory (e.g., +50 for found stock)
  • Negative numbers: Decrease inventory (e.g., -25 for damaged items)
  • Use the item’s configured unit of measurement
  • Examples:
    • Found old stock: +100 pieces
    • Damaged goods: -75 pieces
    • Lost items: -10 pieces

Item Price (Required)

  • Enter the price per unit for this adjustment
  • Affects the total inventory value calculation
  • Use current market price or purchase price
  • Always in your organization’s currency
  • This price will be used to calculate the financial impact

Step 4: Adding Multiple Items

  1. Click "+ New Row" to include additional items in the same adjustment
  2. Repeat the item selection and quantity/price entry process
  3. You can adjust multiple items in a single adjustment transaction

Step 5: Review and Save

  1. Review all entered information carefully
  2. Verify quantities and prices are correct
  3. Ensure the reason and date are appropriate
  4. Click “Save” to create the adjustment

Important: Once saved, the adjustment cannot be edited. It can only be deleted if necessary.

Step 6: Confirmation

  1. The system will process the adjustment
  2. Inventory quantities will be updated immediately if the current date is used otherwise inventory quantity and value will be adjusted on T+1 day (T being the day when the adjustment is created)
  3. The adjustment will appear in the adjustments list
  4. Affected items will show updated stock levels

Deleting an Adjustment

Adjustments can be deleted when they need to be reversed or were created in error. Deleting an adjustment will reverse its effects on inventory.

Step 1: Find the Adjustment

  1. Go to the Adjustments section under Inventory
  2. Use the search function to locate the adjustment
  3. Or browse through the adjustments list
  4. Look for the adjustment by date, reason, or reference

Step 2: Select the Adjustment

  1. Click on the adjustment you want to delete
  2. Review the adjustment details to ensure it’s the correct one
  3. Check the items and quantities that will be affected

Step 3: Delete the Adjustment

  1. Click the “Delete” button
  2. A confirmation dialog will appear
  3. Review the warning about inventory impact
  4. Confirm the deletion

Step 4: Inventory Impact

When an adjustment is deleted:

  • All quantity changes are reversed
  • Inventory levels return to pre-adjustment state
  • Inventory values are recalculated
  • The adjustment is permanently removed from records

Best Practices for Inventory Adjustments

Accuracy and Documentation

  • Double-check quantities before saving
  • Use clear, descriptive reasons
  • Include reference numbers when available
  • Take photos or document physical evidence when possible

Timing Considerations

  • Process adjustments promptly after discovery
  • Use the actual date of the event, not processing date
  • Avoid bulk adjustments unless necessary
  • Consider the impact on ongoing transactions

Approval Process

  • Implement approval workflows for large adjustments
  • Review adjustments regularly for patterns
  • Investigate frequent adjustments for root causes
  • Maintain supporting documentation

Financial Impact

  • Understand how adjustments affect inventory valuation
  • Use appropriate pricing for financial accuracy
  • Consider tax implications of inventory adjustments
  • Review impact on cost of goods sold

Common Adjustment Scenarios

Physical Stock Count Discrepancies

  • Situation: Annual audit reveals differences
  • Action: Create adjustment with reason “Audit correction”
  • Quantity: Difference between physical and system count

Damaged Goods

  • Situation: Items damaged during handling
  • Action: Create adjustment with reason “Items damaged”
  • Quantity: Negative quantity for damaged items

Found Stock

  • Situation: Old stock discovered in warehouse
  • Action: Create adjustment with reason “Old stock found”
  • Quantity: Positive quantity for found items

Theft or Loss

  • Situation: Items missing from inventory
  • Action: Create adjustment with reason “Items lost”
  • Quantity: Negative quantity for missing items

Monitoring and Reporting

Adjustment Reports

  • Generate reports to track adjustment frequency
  • Analyze patterns in adjustment reasons
  • Monitor financial impact of adjustments
  • Review by item, date range, or reason

Audit Trail

  • All adjustments create permanent audit records
  • Track who made adjustments and when
  • Maintain documentation for compliance
  • Review regularly for unusual patterns

Integration with Other Features

  • Adjustments affect inventory reports
  • Impact cost calculations in sales/purchases
  • Influence reorder point calculations
  • Affect financial statements and tax reporting
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