# Inventory Adjustments: Fix the Cause Behind the Count

Canonical: https://millbase.ca/blog/inventory-adjustments-fix-the-cause-behind-the-count
Author: [Coby Birenbaum](https://www.linkedin.com/in/cobybirenbaum/)
Published: 2026-10-19
Updated: 2026-10-19
Archive edition: 2026-04-23

An inventory adjustment corrects a balance; it does not explain why the balance became wrong.

An inventory adjustment corrects a balance; it does not explain why the balance became wrong. Record a reason and supporting evidence before accepting the correction. Repeated adjustments to the same item usually point to a process that needs attention.

## Review the discrepancy

- Recount the physical stock and verify the stock unit.
- Check recent receipts, issues, returns, and transfers around the count time.
- Identify whether movement was recorded in the wrong location or against a duplicate item.
- Route material discrepancies to the appropriate reviewer.

## An illustrative investigation

The shelf is short by exactly one 20-pair box. Before recording loss, check whether a box was issued as one pair. If that happened, correct the transaction and conversion practice; a generic adjustment would conceal the recurring risk.

## Keep the history useful

Use a small, meaningful reason list plus a note for exceptional cases. Review causes over time rather than celebrating a balance that was simply reset.

## Related reading

- [Inventory Management Software for Woodworking: What to Track First](https://millbase.ca/blog/inventory-management-software-for-woodworking-what-to-track-first)
- [Tracking Work in Progress Inventory in a Millwork Shop](https://millbase.ca/blog/tracking-work-in-progress-inventory-in-a-millwork-shop)

## Definitions and further reference

- [Oracle: inventory management explained](https://www.oracle.com/scm/inventory-management/what-is-inventory-management/)

## How Millbase can help your shop

### Connect material records to the cabinet job

When a component shortage or material change affects a job, start with the recorded stock and the work it supports. [Millbase inventory](https://millbase.ca/#inventory) keeps quantities, material costs, receipts, stock lots, and usage history together. Use [project tracking](https://millbase.ca/#projects) to review the associated labour and material costs, then reconcile the physical material before making a new commitment.

Ask the [Millbase AI agent](https://millbase.ca/#how-it-works) a question grounded in your workspace records. For example: *“What inventory records do we have for this material, and what usage is recorded against this project?”* You can select a project or worker, ask follow-up questions, and request [supported reports and CSV exports](https://millbase.ca/#insights).

Use the answer to locate the relevant records and investigate the exception. A physical count, approved specification, or supplier confirmation still establishes facts that have not been recorded.

## Explore the wider topic

For the broader workflow and decisions behind this guide, read [Warehouse Inventory Management for Project-Based Manufacturing](https://millbase.ca/blog/warehouse-inventory-management-for-project-based-manufacturing).

## Frequently asked questions

### Who should approve adjustments?

Match authority to value and risk. The person counting can document the result, while an appropriate reviewer handles material corrections.

### Is a zero discrepancy rate always good?

Not necessarily. It may reflect weak counting or automatic acceptance of expected balances. Review the quality of the counting process too.