# Inventory - Adjustments

Inventory adjustments are necessary when your physical inventory stock counts do not match the calculated count within PhreeBooks. An inventory adjustment will be necessary to synchronize PhreeBooks with physical inventory. The two possible adjustments are increase in inventory (less physical inventory on hand than expected) and reduce inventory (more physical inventory on hand than expected).

#### Inventory adjustment procedure

Inventory shortages can occur form many ways. Pilferage, damage, loss are a few. The stock counts within PhreeBooks will need to be adjusted to match the actual stock on hand.

1. From the main menu, select Inventory->Adjustments.
2. Enter the SKU or a search criteria and press the open icon .
3. Select the SKU to adjust from the popup menu to fill in the item attributes (or if there is only one match, the popup window will close and fill in the necessary information).
4. Enter a reference for this transaction (i.e. ADJ2007-05-12).
5. Enter the post date of the adjustment or use the popup calendar to select a post date. Today's date is loaded by default.
6. Select the GL account popup icon and select the account to apply the adjustment.
7. Enter the total cost of the adjustment. This value only applies to increases in inventory. For inventory decreases, the cost field is ignored and the cost is calculated by PhreeBooks using the items cost method and historical purchase prices.
8. Enter the adjustment quantity.
9. Enter a reason for adjustment. (i.e. damaged, expired, etc.)
10. Press Save to post the transaction to the journal.

### Related Topics

#### Inventory

Setting inventory default accounts
Adding inventory items
Editing inventory items
Copying inventory items
Deleting inventory items
Edit an inventory adjustment
Deleting an inventory adjustment
Inventory assemblies
Adding an inventory field
Editing an inventory field
Deleting an inventory field
Adding an inventory field tab (category)
Editing an inventory field tab (category)
Deleting an inventory field tab (category)