Inventory Adjustments in Bylon EMS
1. Overview
Inventory Adjustments in Bylon EMS are used to correct the quantity of stock recorded in the system when the physical stock available does not match the quantity that should be recorded after an approved stock adjustment.
Adjustments should only be made when there is a legitimate reason for changing the inventory balance, such as:
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Stock breakages
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Lost or missing items
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Damaged goods
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Miscounting during stocktaking
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Expired or spoiled products
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Incorrect stock entries
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Stock found during physical stocktaking that was not reflected correctly in the system
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Other approved inventory discrepancies
An adjustment changes the inventory balance to reflect the actual and approved stock position.
Important: Inventory adjustments should not be used casually. Before creating an adjustment, confirm that the Product Transaction Flow Balance (PTFB) matches the available Commodity Balance/Available Quantity. Adjustments should only be performed after verifying the stock discrepancy and identifying a valid reason.
2. Why Do We Make Inventory Adjustments?
Inventory adjustments are necessary because the quantity recorded in the system can sometimes differ from the quantity physically available in the warehouse.
The difference can occur for several legitimate reasons.
2.1 Breakages
Products may be physically damaged while being stored, transported, loaded, or unloaded.
Example:
The system shows 100 bottles, but 3 bottles have broken in the warehouse.
The physical quantity available is therefore 97 bottles.
An adjustment may be required to account for the 3 broken bottles.
2.2 Lost or Missing Items
Sometimes stock may be recorded in the system but cannot be physically located during stocktaking.
Example:
The system shows 50 cartons, but the physical count finds only 48 cartons.
After the discrepancy has been investigated and approved, an adjustment may be required for the missing 2 cartons.
2.3 Miscounting During Stocktaking
Human error can occur when employees count physical stock.
For example:
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The same items may be counted twice.
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Some items may be missed.
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Different units may be counted incorrectly.
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Cartons may be confused with individual pieces.
If the verified physical quantity differs from the system balance, an adjustment may be required.
2.4 Damaged or Unusable Stock
Products may become damaged and no longer be suitable for sale or use.
Examples include:
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Damaged packaging
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Broken products
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Water-damaged products
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Contaminated products
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Products damaged during transportation
If the damaged stock is no longer part of usable inventory, an approved adjustment may be required.
2.5 Expired or Spoiled Products
Some products have expiry dates and may become unusable after expiry.
For example:
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Food products
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Beverages
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Medicines
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Chemicals
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Other perishable goods
Where expired stock is removed from usable inventory, the appropriate adjustment can be recorded.
2.6 Incorrect Stock Entries
An incorrect inventory entry can sometimes cause the system balance to differ from the actual stock.
For example, a user may accidentally record:
100 pieces
instead of:
10 pieces
After verification and approval, an adjustment may be necessary to correct the stock balance.
2.7 Physical Stock Found in the Warehouse
The opposite can also happen.
The physical stock may be higher than the quantity recorded in the system.
For example:
System quantity: 95 pieces
Physical quantity: 100 pieces
After investigating the discrepancy, an approved adjustment may be required to bring the system balance in line with the verified physical stock.
3. Important Rule Before Making an Adjustment
Before creating an inventory adjustment, verify the stock information carefully.
The Product Transaction Flow Balance (PTFB) should match the available Commodity Balance/Available Quantity before proceeding with the adjustment.
This check is important because an adjustment should correct a genuine inventory discrepancy rather than cover up an error elsewhere in the transaction flow.
Why this check is important
If the PTFB and available quantity do not match, the difference may have been caused by another transaction issue, such as:
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An incomplete stock transfer
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An incorrect stock transaction
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A missing transaction
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An incorrect quantity
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A pending transaction
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A duplicate transaction
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An incorrect warehouse
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Another inventory-related error
The underlying issue should be investigated first.
Do not use an adjustment to correct a discrepancy that should be corrected through the original transaction.
4. How to Create an Inventory Adjustment
Step 1: Open Warehouse Hub
From the Bylon EMS main menu:
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Click Warehouse Hub.
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Select Adjustments.
This opens the Inventory Adjustments section.
Step 2: Click New Adjustments
On the Adjustments page:
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Click New Adjustments.
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The Loss and Adjustments form will open.
This is where you enter the details of the inventory adjustment.
5. Completing the Loss and Adjustments Form
The Loss and Adjustments form contains several fields that must be completed correctly.
5.1 Branch
Select the branch where the inventory adjustment is taking place.
The correct branch should be selected because inventory is maintained according to the relevant branch and warehouse structure.
5.2 Warehouse
Select the warehouse where the affected item is located.
The adjustment will apply to the inventory associated with the selected warehouse.
Example:
If the damaged stock is located in the Main Warehouse, select:
Main Warehouse
Do not select a different warehouse because this would affect the wrong inventory balance.
5.3 Type
Select the appropriate adjustment type.
The available types include:
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Loss
-
Adjusted
Loss
Select Loss when stock has been physically lost, damaged, broken, expired, or otherwise removed from usable inventory.
For example:
10 bottles broken during transportation
would be treated as a loss.
Adjusted
Select Adjusted when the inventory quantity needs to be corrected based on a verified physical stock count or another legitimate inventory reconciliation.
For example:
System quantity: 200 pieces
Physical quantity: 195 pieces
After investigation and approval, the difference may be recorded as an adjustment.
5.4 Time
Enter/select the relevant time associated with the loss or adjustment.
The time helps maintain an accurate record of when the inventory discrepancy occurred or was identified.
Select the appropriate date/time based on the actual event and the company's inventory procedures.
6. Note on Inventory Adjustment
A key control when creating an adjustment is:
Please only do adjustments if the Product Transaction Flow Balance (PTFB) matches with the available quantity/commodity balance.
This means the user should first verify the inventory transaction flow and ensure that the balance is consistent with the available commodity quantity.
If the balances do not match, investigate the transaction history before proceeding.
7. Select Item
After completing the main adjustment information, proceed to Select Item.
The item selection section provides information needed to determine the adjustment.
The information includes:
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Description
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Available Quantity
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Adjustments
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Physical Balance
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PTFB
7.1 Description
The Description identifies the item that is being adjusted.
Select the correct product from the available items.
7.2 Available Quantity
The Available Quantity shows the quantity currently recorded as available in the system.
This provides the system's current inventory position before the adjustment.
7.3 Adjustments
Enter the quantity that needs to be adjusted.
The quantity should be based on the verified difference between the system balance and the physical stock.
Example:
System quantity: 100
Physical quantity: 95
Adjustment required:
5
The adjustment should only be entered after the discrepancy has been verified and approved according to the organization's procedures.
7.4 Physical Balance
The Physical Balance represents the quantity actually counted or verified in the warehouse.
This is important because inventory adjustments should be based on the actual physical stock position rather than an assumption.
Example:
System available quantity: 100
Physical balance: 95
Difference: 5
7.5 PTFB
PTFB (Product Transaction Flow Balance) represents the balance derived from the product's transaction flow.
It should be checked against the available quantity before making an adjustment.
This provides an additional control to ensure that the adjustment is being made against a properly reconciled inventory balance.
7.6 Select/Tick the Item
After reviewing the item information:
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Select the correct item.
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Enter the required adjustment quantity.
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Verify the physical balance.
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Verify the PTFB.
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Tick the item to include it in the adjustment.
Repeat the process for other affected items where necessary.
8. Enter the Reason for Adjustment
Reason is Mandatory
A reason must always be provided when creating an inventory adjustment.
The reason explains why the inventory quantity is being changed and provides an audit trail for the adjustment.
Examples of valid reasons include:
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5 bottles broken during transportation. -
3 cartons damaged during warehouse handling. -
2 pieces missing after physical stock verification. -
10 pieces found missing during stocktaking. -
4 expired units removed from usable stock. -
Physical stock count identified a verified quantity difference.
The reason should be specific and clear rather than simply stating:
Stock adjustment
A detailed reason makes it easier for management and auditors to understand why the adjustment was made.
9. Submit the Adjustment
Before submitting:
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Confirm the Branch.
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Confirm the Warehouse.
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Confirm the Type.
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Confirm the Time.
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Confirm the selected item.
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Confirm the available quantity.
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Confirm the adjustment quantity.
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Confirm the physical balance.
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Confirm the PTFB.
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Ensure a valid Reason has been entered.
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Click Submit.
The adjustment will then be recorded in the Inventory Adjustments section according to the system workflow.
10. Inventory Adjustments Dashboard
After creating adjustments, users can view them from the Inventory Adjustments dashboard.
The dashboard provides filters that make it easier to locate specific adjustment records.
Available filters include:
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Time
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Date Created
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Branch
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Status
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Type
11. Using Inventory Adjustment Filters
11.1 Time
Use the Time filter to identify adjustments according to their type/event, such as:
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Lost
-
Adjusted
This makes it easier to distinguish between loss-related records and other adjustments.
11.2 Date Created
Use Date Created to search for adjustments created within a particular date or period.
This is useful when reviewing recent adjustments or preparing periodic inventory reports.
11.3 Branch
Use the Branch filter to view adjustments associated with a particular branch.
This is especially useful for businesses with multiple branches.
11.4 Status
Use the Status filter to identify adjustments according to their current workflow status.
This can help users identify adjustments that may still require action.
11.5 Type
Use the Type filter to distinguish between different adjustment types, such as:
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Loss
-
Adjusted
12. Applying Filters
To filter inventory adjustments:
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Open the Inventory Adjustments dashboard.
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Select the required criteria.
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Choose the relevant time, date, branch, status, or type.
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Click Apply.
The system will display the adjustment records matching the selected criteria.
13. Exporting Inventory Adjustments
The Inventory Adjustments dashboard also provides an Export option.
Exporting allows users to extract adjustment information for further review, reporting, reconciliation, or record keeping.
For example, management may export adjustments to review:
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Total losses
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Adjustments by branch
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Adjustments within a particular period
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Frequently lost or damaged products
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Inventory discrepancies
The exported information can also be used for analysis and internal reporting.
14. Example: Stock Breakage
Assume the system shows:
Product: 500ML Bottled Water
Available Quantity: 500 bottles
Physical Balance: 495 bottles
During warehouse inspection, 5 bottles are found broken.
The administrator verifies that:
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The physical count is correct.
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The PTFB matches the available quantity.
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The 5 bottles are genuinely damaged.
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The loss has been authorized for adjustment.
The user then:
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Goes to Warehouse Hub.
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Opens Adjustments.
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Clicks New Adjustments.
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Selects the correct branch.
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Selects the correct warehouse.
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Selects Loss.
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Enters the relevant time.
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Selects the bottled water item.
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Enters the adjustment quantity as 5.
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Confirms the physical balance.
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Confirms the PTFB.
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Ticks the item.
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Enters the reason:
5 bottles broken during warehouse handling. -
Clicks Submit.
The adjustment provides a documented explanation for the difference between the previous system stock and the verified physical stock.
15. Example: Stock Miscount
Assume the system shows:
Available Quantity: 250 pieces
During a physical stock count, the warehouse team counts:
Physical Balance: 245 pieces
After investigation, they confirm that 5 pieces are genuinely missing and the PTFB matches the available quantity.
An approved adjustment can therefore be created for the 5-piece difference.
The reason should clearly explain the discrepancy, for example:
5 pieces missing after physical stock verification and reconciliation.
16. When NOT to Use an Adjustment
An adjustment should not be used simply because the system quantity appears incorrect.
First investigate whether the difference was caused by an ordinary transaction or process issue.
For example, do not immediately create an adjustment if:
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A warehouse transfer has not been completed.
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A stock transaction was entered incorrectly.
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A transaction is still pending.
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The wrong warehouse was selected.
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The wrong quantity was entered in a transaction.
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A stock import was incorrect.
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A duplicate transaction was created.
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The physical count has not been verified.
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The PTFB does not match the available quantity.
In these situations, the underlying transaction or process should be reviewed and corrected where appropriate.
17. Why Inventory Adjustments Are Important
Inventory adjustments provide an official way to reconcile verified differences between system records and physical inventory.
They help the business to:
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Maintain accurate stock balances.
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Account for genuine stock losses.
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Record damaged or unusable products.
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Correct verified stock discrepancies.
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Maintain an audit trail.
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Improve inventory reporting.
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Identify recurring stock problems.
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Improve warehouse accountability.
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Support stocktaking and reconciliation.
However, adjustments should be controlled and properly justified because frequent or unexplained adjustments can indicate problems with stock handling, transaction processing, or warehouse controls.
18. Best Practices
When creating an inventory adjustment:
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Always verify the physical stock before making the adjustment.
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Confirm that the PTFB matches the available quantity/commodity balance.
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Select the correct branch.
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Select the correct warehouse.
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Select the correct adjustment type.
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Enter the correct adjustment quantity.
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Always provide a clear and specific reason.
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Do not use adjustments to hide transaction errors.
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Investigate discrepancies before adjusting stock.
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Ensure adjustments are properly authorized according to company procedures.
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Keep supporting documentation where required.
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Regularly review adjustment reports to identify recurring losses or discrepancies.
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Pay particular attention to products with frequent adjustments.
19. Quick Process Summary
Creating an Inventory Adjustment
Warehouse Hub
↓
Adjustments
↓
New Adjustments
↓
Loss and Adjustments
↓
Select Branch
↓
Select Warehouse
↓
Select Type: Loss / Adjusted
↓
Enter Time
↓
Select Item
↓
Check Available Quantity
↓
Check PTFB
↓
Enter Adjustment Quantity
↓
Verify Physical Balance
↓
Tick Item
↓
Enter Mandatory Reason
↓
Submit
20. Adjustment Review Process
Physical Stock Count
↓
Identify Difference
↓
Check Product Transaction Flow Balance (PTFB)
↓
Confirm PTFB Matches Available Quantity
↓
Investigate the Cause
↓
Verify & Authorize Adjustment
↓
Create Adjustment in Bylon
↓
Enter Clear Reason
↓
Submit
↓
Review Adjustment from Inventory Adjustments Dashboard
↓
Export Records if Required
Key Takeaway
Inventory adjustments are used to account for verified stock discrepancies such as breakages, losses, damaged goods, expired products, or confirmed stock-count differences.
The most important control is to verify the PTFB against the available quantity before making an adjustment and always provide a clear reason explaining why the adjustment was necessary.
An adjustment should correct a genuine and verified inventory discrepancy, not replace proper investigation or correction of an underlying transaction error.