Managing Adjustment Reason Codes
Every stock adjustment in AccuArk requires a reason code. Reason codes serve two purposes: they determine whether the adjustment increases, decreases, or leaves stock unchanged, and they provide an audit trail that explains why the adjustment was made. This guide covers how to create, edit, and organize reason codes.
Opening the Reason Codes Form
Navigate to Inventory > Adjustment Reasons from the main menu. The form displays a list of all existing reason codes with their names and directions.
Creating a New Reason Code
Click Add New to create a reason code. Each reason requires:
| Field | Description |
|---|---|
| Name | A short, descriptive label (e.g., "Shrinkage", "Damage", "Count Variance") |
| Description | An optional longer explanation of when to use this reason |
| Direction | Determines the stock effect: Increase (+), Decrease (-), or No Change (N) |
Direction Types Explained
The direction is the most important setting on a reason code because it controls what happens to stock when the reason is selected on an adjustment:
Increase (+)
Reasons with the Increase direction add stock to inventory. Use these for situations where you are adding units that did not come through a purchase order.
Examples:
- Received stock outside of PO process
- Found items during physical count that were not in the system
- Customer returned items that need to be restocked manually
- Samples returned to sellable inventory
Decrease (-)
Reasons with the Decrease direction subtract stock from inventory. Use these for situations where units are being removed without going through a sale.
Examples:
- Shrinkage (unexplained inventory loss)
- Damage (items no longer sellable)
- Theft
- Expiration (perishable goods past their date)
- Write-off (obsolete or unsellable stock)
- Samples or demos given away
No Change (N)
Reasons with the No Change direction do not affect stock quantities at all. They are used exclusively for cost or price corrections where the physical count is correct but the financial values need updating.
Examples:
- Cost correction (supplier invoice differed from PO)
- Price update (new pricing not tied to receiving)
- Cost reclassification
When a No Change reason is selected on the adjustment form, the quantity field can be set to zero and the adjustment only updates the cost and price fields on the item master.
Recommended Standard Reason Codes
Set up the following reason codes to cover the most common adjustment scenarios:
| Reason Code | Direction | When to Use |
|---|---|---|
| Shrinkage | Decrease (-) | Unexplained inventory loss detected during counts or audits |
| Damage | Decrease (-) | Items damaged in storage, handling, or transit |
| Count Variance | Decrease (-) | Physical count is lower than system quantity |
| Count Variance (Over) | Increase (+) | Physical count is higher than system quantity |
| Expiration | Decrease (-) | Perishable items past their sell-by or use-by date |
| Theft | Decrease (-) | Confirmed or suspected theft |
| Received (Not on PO) | Increase (+) | Stock received outside the purchase order process |
| Sample / Demo | Decrease (-) | Items removed for samples, demos, or promotional giveaways |
| Write-Off | Decrease (-) | Obsolete, discontinued, or unsellable items being removed |
| Cost Correction | No Change (N) | Correcting item cost without affecting quantity |
| Price Correction | No Change (N) | Correcting item price without affecting quantity |
| Return to Stock | Increase (+) | Items being returned to sellable inventory from non-sale sources |
Editing and Deactivating Reason Codes
To edit an existing reason code, select it from the list and update the name, description, or direction. Changes take effect immediately for new adjustments but do not retroactively change existing adjustment records.
If a reason code is no longer needed, you can deactivate it rather than deleting it. Deactivated codes remain in the database so that historical adjustments using that code retain their reason reference, but they no longer appear as options when creating new adjustments.
How Reason Codes Appear in Reports
When viewing stock transaction history (Inventory > Transaction History), the reason code is displayed in the transaction details for every adjustment-type transaction. This makes it easy to:
- Filter adjustments by reason to identify patterns (e.g., frequent shrinkage at a specific location)
- Audit all adjustments of a particular type over a date range
- Generate reports for loss prevention by looking at Shrinkage and Theft reasons
- Track cost corrections separately from quantity changes by filtering on No Change reasons
Tips
- Create codes before you need them — Set up your standard reason codes during initial system setup so they are available when the first adjustment is needed
- Be specific with names — Use clear, unambiguous names. "Count Variance" is better than "Adjustment" because it tells auditors exactly why the change was made
- Separate increase and decrease count variances — Create both "Count Variance" (decrease) and "Count Variance (Over)" (increase) so the direction is built into the reason rather than requiring manual selection
- Use No Change reasons for cost fixes — Never adjust quantity just to update a cost. Create a dedicated No Change reason like "Cost Correction" and use it with quantity zero
- Review reasons periodically — As your business evolves, add new reason codes for new scenarios and deactivate codes that no longer apply