Counting Stock: Investigate and Write Off

Counting stock: investigate every difference, correct the document, and write off what is left

Steps 5 to 7 of counting stock and deciding what a difference means: find the cause of every difference outside the band, or establish after two recounts that none can be found, correct the document that was wrong, and write off only what is left, knowing what the money does. It follows Step 4, where you read which differences fall inside the band.

The running example is branch GS-KV-01, where an Adjust-Out of two flagship smartphones at RM 2,450 is RM 4,900 of expense. The person who counted, or who holds the keys to the stockroom, must not also accept the variance and finalise the write-off (Step 2), and your company needs the accounts listed in Before you start before Step 7.

Step 5: investigate before you adjust, and know when not to adjust.
Step 6: correct the document that was wrong.
Step 7: write off, and know what the money does.

Step 5: Investigate before you adjust, and know when not to adjust

The outcome: every difference outside the band has a cause, or has been recounted twice and still has none.

First, recount. A second person recounts every line outside the band before anyone investigates. Many differences disappear at this point.

For each difference that remains, work through this list in order. The first six are not losses, and adjusting them makes the ledger wrong.

What you find	What it really is	What to do instead of an adjustment
The count is inside Min and Max	Timing	Nothing
The branch is short, and a transfer to it is still outstanding in the transfer queue	The goods are in transit. They belong to the company, sit at its in-transit location, and are counted at neither branch	Receive what arrived, and chase the rest. See Stock Transfer Procedures
The branch is over, and a delivery is on the shelf that has not been keyed	A receipt nobody recorded	Key the receipt for the date it arrived
A document was finalised but the balance never moved	The item on the document is not a stock item (a service, a non-stock item, an alias that points at no inventory item; an unlinked basic item is linked for you at posting), or the posting job failed	Fix the item, then ask BigLedger support to re-post the document’s stock movement: Trace Document checks a document’s journal and cashbook line, not its stock. Do not adjust around it
One unit over and one unit under on two similar items	The wrong item was scanned on a sale or a receipt	Correct the document that used the wrong item
The balance is negative	A sale was keyed before its receipt, and the receipt is still to come	Key the missing receipt. An Adjust-In here counts the goods twice when the receipt arrives
Out by exactly one pack quantity	A unit-of-measure mistake in the count	Correct the record
None of the above, after two recounts	A loss or a surplus	Step 7

The report’s Reason column is where the finding goes. It survives a REGENERATE. An uploaded quantity does not.

How you know you got it right: every line outside the band has a reason written against it, and the reasons use a short fixed list (timing, transfer, unkeyed receipt, wrong item, count error, damage, loss). “Adjusted” is not a reason.

Step 6: Correct the document that was wrong

The outcome: the ledger is right because the original mistake was corrected, not covered.

If Step 5 found a wrong document, correct that document. A wrong adjustment is voided from the Stock Adjustment listing. The void reverses its stock and its journal. A second adjustment in the opposite direction leaves two documents that both look deliberate. The same applies to a sale keyed against the wrong phone model: void or return that document, then raise the correct one.

A serial number mistake at receiving shows up later, when a sale is refused. BigLedger refuses a sale whose serial is not at that location. It also refuses a serial that already exists in the company on the document that puts the stock on the shelf. On a plain Purchase GRN it does so only when the GRN applet’s serial switch is on (Step 3 of Closing the Month on Stock). When a sale is refused for a serial that is in the customer’s hand, the mistake is on the receipt. Correct the receipt. An adjustment at the counter only hides it.

Step 7: Write off, and know what the money does

The outcome: a signed adjustment that you could defend to an auditor a year from now.

Stock Adjustment > Stock Adjustment > + > Main Details (location, reference, GL code, remarks) > Line Items

A stock take never moves stock. An adjustment does, and it moves money too. On FINAL, each line posts to the adjustment account, and one balancing line posts to the company’s stock account. An Adjust-Out of two phones at RM 2,450 is RM 4,900 of expense. There is no reason code on the document. The reason survives in three places only: the remarks, the reference, and the account.

GadgetSphere keeps one document per reason:

Reason	Header GL code	Reference
Unexplained loss after two recounts	`EXPENSE-SHRINKAGE`	The stock take session name
Damaged and unsaleable	`EXPENSE-STOCK-DAMAGE`	The damage report number
A count correction that is not a loss (a surplus with no receipt to key)	The default adjustment account	The session name

The screen puts a GL code on the header, and it applies to every line, so one reason goes on one document. (This needs the setting that shows the GL code on the header. A file import can put a different code on each line.) Write the remark as a sentence someone can check: “2 units short after recounts on 12 and 13 March, session KV01-W11, CCTV requested”. The remark becomes the journal line’s description.

Watch the price on every line:

Adjust-Out at the current moving average, which is the default. Any other price changes the average cost of every unit left on the shelf.
Adjust-In needs a real cost. An Adjust-In at zero adds quantity and no value, and pulls the average down for every later sale. Nothing on the screen objects to a blank price. For a surplus with no receipt to key, use the current average.

Who approves. BigLedger has no approval step on an adjustment, and it never refuses an Adjust-Out that takes a balance below zero. The finaliser checks the balance instead: each Adjust-Out line shows the balance at that location, and the quantity taken out must not exceed it. They know none slipped through when Stock Balance shows no negative balance at that branch after FINAL. If one does, void the adjustment and find the missing receipt (Step 5). The control for who finalises is who is given the Stock Adjustment applet. Hiding FINAL does not split the job: the setting that hides it hides it from everyone, and the permission that would give it back cannot be granted for this applet, so a tenant that hides FINAL cannot post them on screen. GadgetSphere therefore gives the Stock Adjustment applet only to the area stock controller and the finance manager; the branch counts and records its reasons in the stock take and never sees the adjustment screen, and finance raises and finalises the adjustment from the report. GadgetSphere’s limits: the area stock controller may finalise up to RM 1,000 per session, and anything above goes to the finance manager.

When a branch is too small to separate duties. Some branches have only one person on the stock. Then the check comes afterwards. Every Monday, the finance manager opens every adjustment finalised the week before, reads the remarks and the reference, and asks about any that say only “stock take”.

How you know you got it right: every finalised adjustment has a reference to a session or a report, a remark somebody could check, an account that names its reason, and a finaliser who did not count.

What success looks like for this part

Every line outside the band has a reason from the short fixed list written against it; every wrong document was corrected, or voided and the correct one raised, rather than adjusted around; every finalised adjustment has a reference to a session or a report, a remark somebody could check, an account that names its reason, and a finaliser who did not count (or, at a branch too small to separate duties, the finance manager’s weekly review of last week’s adjustments); and Stock Balance at the branch shows the quantities each adjustment wrote off or added, with no negative balance. Then run the whole task’s success check.

Common mistakes in this part

The mistakes are listed together on the front page. Most belong here: adjusting for a transfer still in transit, an Adjust-In with no price, the same person counting and finalising, and correcting your own mistake with an adjustment.