Missing stock at a UK fulfilment warehouse
Agree a stock cut-off, rebuild each batch balance from supported movements, then compare it with a physical count covering every storage status. Trace unresolved differences through factory, transport and warehouse handovers before assigning responsibility. For China-side packing evidence, contact Cambridge China Bridge.
Fix the scope and opening balance
Ask the warehouse to identify the affected product, variant, batch, location and stock status. Establish whether 'missing' means absent from the building or unavailable to pick. Agree a cut-off time and time zone, then preserve dated stock snapshots and movement exports from both systems before anyone corrects them.
Start from the last agreed physical count or reconciled closing balance. Match the opening quantity to its supporting records, including movements posted late. Use the same unit throughout: individual item, retail pack or carton. Document pack conversions and barcode aliases. Keep batches separate; an excess in another batch does not explain the shortage.
Rebuild the balance from movement evidence
Expected closing stock is opening stock plus confirmed receipts and physically received returns, minus confirmed outbound movements, with supported adjustments added or deducted. Include transfers across the boundary being reconciled. Transfers within that boundary should cancel overall while changing location balances. Reconcile physical stock separately from available stock, which may exclude reservations and quarantined goods.
Request transaction-level records with batch, quantity, unit, event time, posting time, reference and operator. Trace picks through staging, dispatch and cancellations so the same outbound movement is not deducted again at dispatch. Use the table to challenge unsupported entries rather than accepting a summary total.
| Movement | Evidence to compare | Difference to investigate |
|---|---|---|
| Opening balance | Previous signed count and closing reconciliation | Inherited error or changed unit |
| Receipts | Receiving count, carton identifiers and discrepancy notes | Expected quantity booked as actual receipt |
| Picks and dispatches | Pick scans, staging records and dispatch confirmation | Duplicate deduction, cancelled pick or wrong variant |
| Returns | Physical return receipt, batch identification and inspection status | Refund treated as receipt or return recorded twice |
| Adjustments | Reason, supporting record, approval and audit history | Unexplained write-off or status change treated as loss |
| Transfers | Sending and receiving records for the same goods | Unmatched handover or stock still in transit |
Trace receipts, returns and adjustments
Compare factory packing records and loading photographs with transport handovers and the warehouse's actual receiving count. A packing list records the declared contents; ask what was physically checked on arrival. Separate sealed cartons accepted without opening from units actually counted. Our batch traceability guide helps connect those records, while missing cargo guidance covers gaps in the transport chain.
For returns, distinguish customer authorisation, refund, arrival, inspection and restocking. Count physically present damaged or quarantined goods separately from saleable stock. Check adjustment reasons for samples, replacements, repacking, destruction and barcode corrections. A change of status should move goods between categories without reducing the building's total. For transfers between warehouses, use our stock transfer guide.
Count the affected batches physically
Agree a movement freeze for the affected stock, or log every movement during counting and roll it back to the cut-off. Have counters record quantities without seeing the expected balance. Count each affected batch across pick faces, reserve locations, receiving areas, dispatch staging, returns, quarantine and damaged-stock areas. Check neighbouring locations and mixed cartons for misplaced variants.
Open cartons where contents remain unverified and count the units inside. Record batch labels, location, condition, counting time and counters, supported by photographs where useful. Recount discrepancies independently. Compare the signed count with the rebuilt balance using the same cut-off and stock categories. Record goods with unreadable batch labels as unresolved rather than assigning them to a convenient batch.
Assign responsibility from the handover trail
Prepare a discrepancy file showing expected stock, counted stock, the remaining difference and the evidence for each movement. Identify the last supported handover and the next point where quantities disagree. Separate record errors, mislocated goods, receiving shortages and losses after receipt. Inspection photographs alone do not establish every carton's contents. Review warehouse and transport terms, notification deadlines and evidence requests while the investigation continues.
Ask each party to respond to the specific unexplained handover rather than an accusation. Keep uncertain causes open. Approve any stock correction with a reason and preserve the original records; track compensation separately. HMRC guidance says VAT may still be due on lost goods in some cases and not in others. Ask your accountant to assess the established facts before changing VAT records.
Frequently asked questions
Does a warehouse stock shortage prove the factory shipped less?
No. Compare actual receipt evidence, supported warehouse movements and a batch count with factory packing and transport records. An unexplained balance alone does not locate the loss.
Should I deduct both picks and dispatches from stock?
Follow the warehouse system's movement logic. A pick may only move goods into staging. Deduct the physical outbound movement once and check cancellations and reversals.
Do refunded orders count as stock returns?
A refund does not prove goods arrived back. Add returns only against physical receipt evidence, with batch and condition recorded. Keep quarantined returns separate from saleable stock.
Should I accept a stock adjustment before the count?
Preserve the original records first. Ask for a batch-level count and movement reconciliation, then approve an explained correction. Keep unresolved causes and any compensation claim visible.