Adjusting stock: the approval flow

The count is over and a difference has turned up: the books show 40 pieces while the shelf holds 34. The most dangerous step begins here: "let's bring the books into line with the shelf". An adjustment is not an ordinary edit but a document: it writes off a shortage or books a surplus, so it affects money. The approval flow is there not to slow the adjustment down but to stop a mistake before it reaches the books.

Why you cannot just fix it at once

There are three reasons. The first is that the count itself may be wrong: someone slipped or counted a different row. The second is that the error may lie in the books, for example a receipt was never entered or a unit was written incorrectly, and an adjustment would hide it. The third is that an adjustment can become a way to "close" a shortage. The main danger is that a correction buries the cause: the figure is put right, but why the shortage arose stays unknown.

Seven steps of the flow

1. The difference is spotted: the count result is compared with the books.
2. An independent counter recounts the position.
3. The cause is identified.
4. An adjustment proposal is written: what, how much and by which document.
5. Depending on the sum, the responsible person approves or rejects it.
6. The approved adjustment is posted to the books.
7. The papers go to the archive.

A worked example: the books show 40 pieces, 34 were counted, and one piece costs 85,000 so'm in cost price. The shortage is 6 pieces, or 510,000 so'm. That exact sum should be visible in the proposal, because the approver decides by money, not by pieces.

Who does what? The counter counts, the zone lead organises the recount, the warehouse head writes the proposal, someone else approves it and the accountant posts the document. The person who wrote the proposal does not approve it: two pairs of eyes cut both mistakes and abuse.

Evidence for approval

The proposal carries whatever is enough for a decision:

• the recount result and who did it;
• a photo, if the goods are damaged or unusable;
• the history of receipts and issues over recent days;
• a cause code and a short comment.

A sample entry: "Books 40, count 34, recount 34. Cause: unrecorded movement, 6 pieces sent to a shop, delivery note not found. Difference minus 6, 510,000 so'm." There is an important idea here: if the cause is an unrecorded movement, the right fix is not to write off the shortage but to enter the missing document. Otherwise goods that went to the shop get recorded as "lost" and the real document is left hanging.

It is convenient to pick causes from an agreed list: counting error, unrecorded movement, unit or pack error, damaged goods, loss, supplier short delivery. With such codes it is easy at year end to answer "which cause repeats most often?".

Thresholds and posting

The level of approval depends on the sum. The thresholds below are only a sample, since a company sets its own: up to 300,000 so'm the warehouse head, from 300,000 to 2 million so'm the head and the chief accountant, above that the director. A surplus is approved too: a surplus often points to a receipt that was never posted or goods mixed up with another position. For small differences a simplified route is possible: for example, a difference of up to 50,000 so'm is approved by the zone lead, but the cause is still recorded.

There is a subtle point in posting: enter the adjustment not as "final balance 34" but as "difference minus 6". Goods keep moving between the count and the approval, so the final figure goes stale, whereas the difference as of the count date stays right. Set a deadline for approval, for example three working days, or proposals pile up. A rejected proposal goes back for rechecking with a comment.

Common mistakes

• The counter changes the booked balance personally.
• "Approved" is typed in a chat and leaves no trace in the documents.
• All differences are gathered into one general write-off document with no detail.
• The adjustment is approved but the cause is not recorded.
• There is no deadline, so old proposals hang for months.

Conclusion

An approval flow for adjustments is not slowness but trust: every change arrives with evidence, a cause and a responsible person. If you lack the resources to recheck differences and establish their causes, the StockCheck team recounts the positions and hands over the list, while the approval decision stays with you.