Window CREATE SHRINKAGE OR DECREASE

General Description

The window Create Shrinkage or Decrease is the module where losses, deteriorations, damages, or negative inventory adjustments are recorded. This window serves three functions depending on the document status: create new shrinkages from scratch, edit existing shrinkages that have not been finished, or view shrinkages already closed in read-only mode.

This window has the same form, structure, and procedure as the Warehouse Consumptions window, following the same design pattern as all document creation windows in Kardex Tauro. However, it presents important differences in its purpose and effects, since a shrinkage represents the definitive loss of products from inventory without economic compensation.

What is a Shrinkage or Decrease?

A Shrinkage or Decrease is the document that formalizes the definitive removal of products from inventory for causes such as deterioration, damage, expiry, theft, obsolescence, or negative inventory adjustments. It represents the loss of merchandise without any economic compensation, whether due to natural, operational, or external causes.

Key features:

  • When finalizing it, automatically deducts the stock on hand from inventory.
  • Generates the corresponding entries in the Kardex as an issue for shrinkage or decrease.
  • It does not generate accounts receivable or payable.
  • It validates that there are products available in inventory before allowing the shrinkage.
  • It can only be printed when it is closed/finalized.
  • If the products use serial numbers, these remain linked to the shrinkage.
  • It requires documenting the cause or reason for the decrease.
  • It represents a financial loss for the company.

Document statuses:

  • Open: Document in editing process, products can be added or modified.
  • Closed: Document finished, it can no longer be edited, it can be printed, stock on hand is deducted.
  • Deleted: Document voided, visible only as a historical record.

Types of shrinkages recorded here:

  • Expired or soon-to-expire products
  • Damaged or deteriorated merchandise
  • Obsolete or discontinued products
  • Losses from robbery or theft
  • Negative differences in physical counts
  • Non-recoverable defective products
  • Merchandise affected by environmental conditions
  • Negative inventory adjustments

Window Structure

The window is organized into several clearly differentiated zones:

Upper Area - Information Selectors

At the top there is a double selector that identifies the relevant information of the shrinkage:

Person in charge selector:

It allows selecting the employee or area responsible for recording or authorizing the shrinkage. The selector works in three complementary ways:

  • Text field: The third party's code can be typed directly.
  • Search button: Clicking the button with the magnifying glass icon opens a dialog box where you can search for and select the responsible party from a complete list.
  • Name label: It automatically shows the name of the selected third party.

Cause selector:

It allows you to identify the reason for the shrinkage (expiry, damage, theft, adjustment, etc.). It works in the same way as the previous selector, with a text field, magnifying glass button and name label.

Real-time validation:

If a nonexistent responsible party or cause code is entered in either of the two selectors, the field is set with red background color, immediately indicating that this code does not exist in the database. This validation is also executed before saving the document, guaranteeing that both fields really exist.

Mandatory requirement:

Both selectors are required in order to carry out the shrinkage: the responsible party and the cause. Without both, the system will not allow you to save the document.

Upper Zone - Document Information

Document number:

  • When a new shrinkage is being created, the word appears in this field "NEW", indicating that the document has not yet been saved and therefore has no assigned number.
  • After saving the document, the system automatically assigns a unique consecutive number.

Date selector:

It allows setting the shrinkage date. By default it takes the current date, but it can be modified if necessary.

Save Document Button:

At the top right there is a large, prominent button that says "Save document". This button starts the process of saving and finalizing the document.

Central Product Grid

Central Area - List of Written-off Products

In the center of the window there is a grid that shows the products being written off. The columns of the grid are:

  • Code: Unique identifier of the product.
  • Name: Product description.
  • Quantity: Number of units being written off.
  • Amount: Unit value of the product.
  • Total IVA: IVA amount in money.
  • Total: Total value of the product including IVA.
  • Subtotal: Value of the product before IVA.

By default, this grid appears empty when a new shrinkage is created. Products are added using the controls located at the bottom.

Add Products to the Shrinkage

Bottom Left Zone - Product Selector

To add products to the shrinkage, the controls located in the lower left are used:

Product selector:

  • Text field: The product code can be typed directly.
  • Magnifier button: Clicking the button with the magnifying glass icon opens a dialog box where the product can be searched for and selected from a complete drop-down list.

Units field:

Numeric field where you type the number of units being written off for the selected product.

Add button:

A button with the "+" symbol that transfers the selected product with the specified quantity to the central product grid.

Adding process:

  1. Select the product in the selector (by code or with the magnifying glass).
  2. You type the number of units to write off.
  3. Click the "+" button.
  4. The product is automatically added to the central grid.
  5. As many products as necessary can be added.

Stock on hand validation:

The system automatically validates that there are products available in the inventory. If you try to type a quantity greater than the stock on hand, the control turns red, indicating that you cannot write off more than you have. This validation prevents shrinkages of unavailable products.

Existing product validation:

If the code of a nonexistent product is entered in the selector, the control turns red, indicating that this product does not exist in inventory. This visual aid prevents typing errors.

Editing Products in the Grid

Once the products have been added to the central grid, it is possible to modify their information before finalizing the document:

Quantity editing:

To modify the quantity of a product already added:

  1. Select the product by clicking on it in the grid.
  2. Double-click the "Quantity" column.
  3. A small window is displayed where the new number can be written.
  4. The system validates that the new quantity does not exceed the available stock on hand.
  5. Totals are recalculated automatically.

Amount and IVA editing:

The unit value and the IVA percentage of each product can be modified by double-clicking the corresponding columns. When any of these values is changed, the system automatically recalculates the subtotals, IVA and totals of the product and of the entire document.

Financial Information of the Shrinkage

Lower Right Zone - Financial Summary

To the right of the product selector the consolidated financial information of the shrinkage is shown. This information is simple and direct:

  • SubTotal: Total value of the written-off products before VAT.
  • Shrinkage Total: Final value of the shrinkage including VAT.

Differences with other windows:

In the shrinkage, the following are NOT shown:

  • Detailed taxable base.
  • Discount information.
  • Payment information, cash, credit or change (there is no financial transaction).

These totals are automatically recalculated every time the quantities, values or IVA of the products in the grid are modified.

Saving and Finalizing the Document

The saving process is similar to that of other windows: when clicking the button "Save document", the system shows a confirmation pop-up window that allows deciding the status of the document.

Window "Finalize Shrinkage"

This pop-up window presents the following options:

Information displayed:

  • The Shrinkage Total for informational purposes.
  • NO payment information is displayed (cash, credit, change) because a shrinkage does not generate financial transactions.

Main question:

"Do you want to finish now or do you prefer to leave the document open to finish it later?"

Available options:

Finalize now:

  • The document is completely finished and closed.
  • It can no longer be edited.
  • The document can be printed.
  • The stock on hand is automatically deducted from inventory.
  • The corresponding entries are generated in the Kardex.
  • The document is ready for filing and internal control.
  • The loss is permanently recorded.

Finalize later:

  • The document remains in draft or "open" status.
  • It can continue to be edited at any future time.
  • Products can be added, modified or deleted later.
  • It cannot be printed.
  • It does not affect inventory or Kardex yet.
  • Useful when the shrinkage is incomplete or additional information or authorization is being awaited.

Critical implications of the choice:

The decision between finishing now or later is fundamental because it determines whether the inventory and the Kardex are updated:

  • If it is finished later, the document remains editable but has no effect on the inventory or the Kardex. The products are not deducted until it is finalized.
  • If you finish now, the document is locked for editing and the inventory and the Kardex are automatically updated. The products are deducted and recorded as a definitive loss.

Recommendation:

You should only choose "Finish now" when you are completely sure that all the written-off products are correctly recorded, the physical inventory matches what is going to be recorded, and you have the corresponding authorization (especially for high-value shrinkages).

System Validations

The window implements several validations to guarantee data integrity:

Real-time third party validation:

  • If a nonexistent responsible party or cause code is entered, the field immediately gets a red background.
  • This validation also runs before saving the document.

Product validation:

  • Only products that exist in inventory can be added.
  • If a nonexistent product code is typed, the control turns red.
  • The product selector with the magnifying glass only shows valid products.

Stock on hand validation:

  • The available quantities in inventory are validated.
  • You cannot write off more units than are available.
  • If an attempt is made to type a quantity greater than the stock on hand, the control turns red.
  • This validation prevents shrinkages of unavailable products.

Quantity validation:

  • Quantities must be positive numbers.
  • The system does not allow negative or zero quantities.

Amount validation:

  • Unit values must be valid numbers.
  • IVA percentages must be within valid ranges.

Validation on finalizing:

  • The system verifies that there is at least one product in the shrinkage before allowing you to finish.
  • All totals are recalculated to guarantee consistency.
  • It validates that the two mandatory selectors (responsible party and cause) have been captured.

Typical Workflow

The complete process of creating a shrinkage or decrease follows these steps:

Step 1: Identify the person in charge and cause

  • Open the "Create Shrinkage or Decrease" window.
  • Select the responsible party using the text field or the magnifying glass button.
  • Verify that the name appears correctly (field without a red background).
  • Select the cause of the shrinkage.
  • Verify that both selectors are correctly identified.

Step 2: Add products

  • For each product to write off:
    • Select the product in the bottom selector (by code or with the magnifying glass).
    • Verify that the code is valid (no red background).
    • Type the number of units to write off.
    • Verify that the quantity does not exceed the available stock on hand (no red background).
    • Click the "+" button to add it to the central grid.
  • Repeat for all the required products.

Step 3: Adjust information

  • Review the central product grid.
  • If necessary, double-click quantities, values or IVA to edit.
  • Verify that the totals (SubTotal and Total Shrinkage) are correct.

Step 4: Save the document

  • Click the "Save document" button at the top right.
  • The "Finalize Shrinkage" window opens.

Step 5: Decide the document status

  • If the shrinkage is incomplete or pending authorization: Choose "Finish later" to continue editing later.
  • If the shrinkage is complete and authorized: Choose "Finish now" to close the document, deduct the inventory and generate the entries in the Kardex.

Step 6: Confirm effects

  • If "Finalize now" was chosen:
    • The document is closed and cannot be edited.
    • The inventory is automatically updated with the deduction of the written-off products.
    • The entries are generated in the Kardex.
    • The document can be printed for filing.

Relationship with Other Windows

Window List of Shrinkages and Decreases:

It shows all the shrinkages created, allowing you to search, filter, view, print and delete shrinkages. It is the management center of the loss control process.

Inventory Window:

It is automatically updated when a shrinkage is finished, deducting the stock on hand of the written-off products. The written-off products are no longer available.

Kardex Window:

It automatically records the outbound movement when a shrinkage is finished, maintaining complete traceability of the products that are lost from the inventory.

Third Parties List Window:

It provides the list of employees or areas used in the responsible party selector of this window.

Serial Numbers List Window:

If the written-off products use serial numbers, the serial numbers captured during the shrinkage are recorded and can be consulted from this window.

Window Physical Counts:

When physical counts are carried out and negative differences are detected, these are recorded as shrinkages or decreases from this window.

Usage Recommendations

Always verify the person in charge and the cause

Before adding products, make sure that both the responsible party and the cause are correctly selected. Check that the fields do not have a red background, which would indicate nonexistent codes.

Use the magnifying glass search when you do not know the codes

If you do not remember the exact code of a responsible party or product, use the magnifying glass button to search by name. It is more practical and avoids typing errors.

Respect the stock on hand validations

If the control turns red when typing a quantity, it means that there is not enough stock on hand. Do not try to force the system; verify the real inventory or adjust the quantity.

Always document the cause

Use the cause field to record the specific reason for the shrinkage (expiry, damage from handling, theft, inventory adjustment, etc.). This information is crucial for analysis and corrective actions.

Add products accurately

Carefully verify the quantities before adding each product. Although they can be edited later (if the document is not finalized), it is more efficient to do it correctly from the start.

Edit directly in the grid

Take advantage of the double-click functionality to edit quantities, values and IVA directly in the central grid. It is faster than deleting and re-adding products.

Review the totals before saving

Make sure that the SubTotal and Total Shrinkage correctly reflect the written-off products. These values will be the ones recorded in the Kardex.

Carefully decide between finishing now or later

  • Choose "Finish later" only if you really need to continue editing later or are awaiting authorization.
  • Choose "Finish now" only when the shrinkage is complete and authorized.
  • Remember that only upon finalizing is the inventory deducted and the entries generated in the Kardex.

Print the document for filing

Once finished, print the shrinkage for physical filing as support for the recorded loss.

Do not finalize prematurely

If you have doubts about any product, quantity or value, or if you need authorization, it is better to save with "Finish later" and review before definitively processing the shrinkage.

Keep traceability of serial numbers

If the written-off products use serial numbers, make sure to correctly capture the serial numbers during the shrinkage process to maintain complete traceability of losses of serialized products.

Train the staff

Make sure that all employees who record shrinkages understand how the system works, the automatic validations, and the importance of correctly documenting the cause.

Implement authorization controls

Establish clear policies about who can authorize shrinkages, especially for high-value products or significant shrinkages.

Analyze shrinkages periodically

Use the "List of Shrinkages and Decreases" window to analyze loss patterns by cause, responsible party or product type. This allows you to identify improvement opportunities and reduce future losses.

Investigate unusual shrinkages

If you detect unusually high shrinkages or suspicious patterns, investigate the causes to detect control problems, thefts or process errors.

Document with evidence

When possible, attach photographic evidence or supporting documentation to the shrinkages, especially for high-value losses or for causes such as theft or damage.

Reconcile shrinkages with physical inventory

Periodically verify that the recorded shrinkages match the real physical inventory, especially after physical counts.

Integrate shrinkages with audits

Shrinkages are an important component in inventory audits. Keep clear and documented records to facilitate the audit process.

Establish shrinkage budgets

Define annual or monthly shrinkage budgets by area or product type, and monitor them to evaluate the performance of inventory control.

Review shrinkages of perishable products

If you handle products with an expiry date, periodically analyze shrinkages due to expiry to optimize inventory turnover (FEFO - First Expired, First Out).

Monitor trends

Use the reports to identify loss trends over time and evaluate whether the corrective actions implemented are producing results.

Kardex Tauro - Professional Inventory Management System

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