Inventory Shrinkage

Inventory shrinkage refers to the loss of products or stock that occur between the time it's recorded and the actual physical count. This loss can happen for various reasons, such as theft, damage, spoilage, or administrative errors. Essentially, it's the discrepancy between the expected inventory levels and the actual amount on hand. Managing and minimizing shrinkage is important for a business’s profitability, as it directly affects inventory costs and overall financial health. Regular inventory counts and improved security measures are common ways to monitor and reduce shrinkage.