How do I write off damaged or expired stock?

Damaged stock is not deleted from the system; it is scrapped with a document that takes it out of stock and records its value as a loss. That is what separates it from a stock adjustment: here you know the reason and you own it.

Steps

1. Open Inventory → Scrap orders — Figure 1 — then New order.
2. Choose the warehouse and add the items and quantities — Figure 2.
3. Write the reason plainly: expiry, breakage, transit damage, poor storage.
4. Attach a photograph if you can, then Save and Approve.
5. On approval the quantity leaves and an entry is created: debit scrap expense / credit stock.

When to use which of the three

• Scrap — you know the item, the quantity, and the reason, and the damaged goods are in front of you.
• Adjustment — the balance is wrong for some older reason and you want to correct it.
• Stocktake — you count the whole warehouse and settle the differences in one go.

Notes

• Approve the scrap when it happens, not at year end; stock inflated with damaged goods gives you wrong purchasing decisions.
• Restrict the scrap permission to one responsible person; it is a direct route to taking goods off the books.
• Review the scrap report monthly; a rise against one item means a fault in storage or in the quantity you buy.