While fraud may be your first thought when a business files an inventory loss claim, it isn't always the culprit behind missing items.
Complex production processes, varied accounting methods and the sheer volume of items make it difficult to measure inventory accurately. As a result, many companies experience inventory shrinkage, or a discrepancy between recorded inventory and actual inventory.
One common reason behind inventory shortages is miscalculating the amount of inventory used. For example, an ice cream shop might think it can dip 100 cones in a can of chocolate, but it actually got 95 cones out of the last can and 85 from the one before that. Unless the shop keeps historical data on its chocolate usage, its inventory count likely won't be accurate.
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