Parts nobody scanned
Your records expect it and no count exists. That is not a variance yet — it is an unanswered question. It reads as a total loss of the line, which is almost never what happened.
After the count
The count is done and the numbers do not agree.
A variance is a question, not a verdict. In thirty-five years of watching people work through them, theft comes a long way down the list — well below units of measure, paperwork still in flight, and a part that lives in two places where only one of them got counted. This is the order to look in.
Before you investigate a single part
Rule out the count itself.
Most of the variances on a fresh report are not stock problems. They are counting problems, and they are cheap to fix on the day and expensive to investigate a fortnight later.
01
02
Locations nobody visited
Usually short, and usually the awkward ones: the top shelf, the mezzanine, the container out the back. Every part that lives there will show as short by exactly what was in it.
03
Locations checked and found empty
Different from the one above and worth keeping separate. Somebody stood in front of it and there was nothing there. That is a finished job and a real finding.
Close those three lists first. Chasing variances before you have is how a week disappears investigating stock that was only ever behind a door nobody opened. Why a count is not finished until you know what you missed →
The causes, in the order they actually turn up
Work down this list before anybody says the word shrinkage.
01
Units of measure — the biggest single cause, every time
You buy it in boxes of twelve and sell it in ones. The system holds eaches, the counter counted cartons, and the line is out by a factor of twelve. It is unmistakable once you look for it, because the variance is a clean multiple rather than an odd number.
Check this before anything else. A part file can carry a unit of measure, and the fastest fix is to make sure every counter knows, per part, whether they are counting the box or what is in it — decided before the day, not argued about after.
02
The same part in two places, and only one was counted
A pick face and a pallet up top. A second bin somebody created last winter. The count is correct for the bin it was made in and short for the part overall. Look at where else that code has ever been.
03
Paperwork still in the air
Goods received onto the floor but not booked in yet — you will count it and the system does not expect it, so it reads over. Stock picked and sitting on the despatch dock but not invoiced — you will count it, and it is already sold. Both are timing, not loss, and both disappear if the cut-off was agreed in advance.
04
Three different numbers for one thing
Your part number, the barcode printed on the box, and the supplier's code. When those get mixed in a file or on a label, two real parts merge into one line or one part splits across two — and the two variances are equal and opposite. If you see a short and an over of the same size, look here first.
05
Kits, assemblies and things made from other things
Components consumed into a finished item that has not been booked as built. The components read short, the finished goods read over, and nothing has been lost at all.
06
Returns, quarantine and the corner nobody owns
Customer returns waiting to be assessed, damaged stock set aside, supplier returns waiting for a credit. Real stock in a real place, usually with no location in the system, counted by somebody who did not know whether it counted.
07
Fractions, and our own limit here
Counts are whole numbers. If you hold 13.8 metres of cable or 2.5 kilos of something, the closest a count can get is 13 or 14 and that line reads short or over every single time. Those are not variances and should not be investigated as ones. Take them out of the comparison, or know which lines they are. Decimal counting is on the list and is not built.
08
And then, actual loss
Breakage, walked out the door, delivered and never received. It is real and it happens. It is also last, and a business that starts here spends its energy on suspicion and its money on the wrong controls.
Reading the report
Short and over are not the same question.
SHORT
Less on the shelf than the books say
The one everybody worries about, and the one most likely to be a missed location or a second bin. Genuine loss usually shows as a pattern — the same kinds of items, the same area — rather than as one line.
OVER
More on the shelf than the books say
More interesting, and more ignored. Nobody investigates finding extra stock, but an over usually means something was received and never booked, or sold twice on paper. It is the same broken process that will produce a short next quarter.
NEVER COUNTED
In the books, never scanned
The most valuable line on the report, because it is the one you can still act on. Either it has gone, or nobody went and looked — and those are different phone calls.
NOT IN THE BOOKS
Counted, and your system has never heard of it
Stock you own and cannot sell, because nothing knows it exists. Often discontinued lines, returns, or a part set up twice under two codes.
If you are going to recount
Recount properly or do not bother.
A recount that confirms the first count tells you nothing if it was done the way the first one was.
BLIND
Do not tell them the number
Not the expected figure, and not the first count either. Give somebody either one and you will be told it back. The whole point of a recount is a second independent answer.
SOMEBODY ELSE
A different person, ideally a different area's
The person who counted it the first time will make the same assumption the same way, in good faith. Whoever runs that area is the worst choice of all.
CHOOSE
Recount what matters, not what is easy
The expensive lines and the ones the business actually runs on. Nobody has time to recount everything, and recounting the cheap and reachable half is how a recount becomes theatre.
What happens to the number
Adjust in your accounting system. Fix the cause in the warehouse.
The adjustment belongs where your audit trail is, made by whoever signs off your accounts. We report the difference and do not write to your books — reporting a discrepancy and altering somebody's accounts are different kinds of responsibility.
We also do not hold your cost prices. The portal knows part numbers, descriptions, barcodes and locations, and nothing about what anything is worth, so it cannot rank your variances by value and does not pretend to. Export the comparison and sort it by value in the system that knows — that is five minutes in a spreadsheet and it is the right place for it.
And write down what you found, not just what you changed. An adjustment with no reason against it is a number somebody will query next year and nobody will be able to explain. Units of measure, a bin that was never counted, a supplier who short-ships — that note is the entire value of having counted, and it is the thing that makes next year's variance smaller.
On MYOB AccountRight, the Inventory Count Sheet loads into a stocktake as it comes and the whole comparison is done for you. Counting against a MYOB file →
Staring at a variance report?
Send us a few lines that do not make sense. We have seen most of them before, and the answer is usually units of measure or a bin nobody counted.