An adjustment records a change in inventory that is not a purchase, a sale, or a transfer. It is how you keep your recorded stock honest when units leave (or occasionally enter) for reasons that have nothing to do with selling them — breakage, spoilage, free samples, personal use, theft, or a counting correction after a stocktake.
Each adjustment captures the item, the quantity, and a reason, so the change is documented rather than silently overwriting a number. That paper trail matters at tax time: waste and samples are real costs, and a categorized adjustment is what turns "the jar broke" into a deductible line rather than an unexplained inventory gap.
Adjustments are the mechanism behind reconciling a physical count. When a stocktake finds you have 47 bars of soap but the system says 50, the difference is posted as an adjustment so the recorded quantity and the shelf finally agree.
Related terms
Stocktake
The process of physically counting inventory at a location and comparing it to recorded quantities. Variances are reconciled by creating adjustment transactions.
Inventory Valuation
The total monetary value of all inventory currently in stock, calculated based on purchase costs. A key report for understanding the assets held in your business.
Transaction Method
The payment method used for a transaction, such as cash, credit card, PayPal, or Venmo. Can include fixed or percentage-based fees for accurate cost tracking.