In the course of retail or wholesale trade, every store inevitably faces inventory losses. These may include products damaged during transportation or display, expired products, or goods used for the store’s own operational needs, such as stationery and cleaning supplies.
For accurate financial accounting, simply removing these products from the warehouse is not enough — the owner needs to understand the structure of these losses. Therefore, the following questions often arise:
«How can the program be configured so that salespeople clearly specify what happened to the product when writing it off?»,
«How can we determine the monetary value of products lost specifically due to spoilage and the amount used for the office’s own needs?»,
«Can one report show subtotals separately for each write-off reason?», and
«How can we view the total consolidated quantity of a specific written-off product without linking it to each individual date?».
Below, we will explain in detail how to configure write-off reasons in Torgsoft and use the «Product Write-off Report» for an in-depth analysis of losses.
1. Preparation: how to configure write-off reasons (conditions)
To enable the program to distinguish damaged products from goods used for the company’s own needs, these reasons must first be created. In Torgsoft, write-off reasons are implemented through counterparties assigned to a special category.
By default, the program already includes the basic categories «Write-off» (general) and «Inventory Write-off». However, these are not sufficient for detailed analytics.
How to expand the list of reasons:
When creating a new write-off document (Document → Write Off Products from Warehouse → New Write-off), click the «Directory» button in the «Write-off» field. The counterparty form will open with the fixed «Write-off» category. Here, you can add new counterparties representing write-off reasons, for example:
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«Product damage»
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«Spoilage / Expiration»
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«Store’s own needs»
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«Defect (non-returnable)»
From then on, when a salesperson or warehouse employee processes the removal of products, they will be required to select a specific reason (counterparty) from the list to which the product is written off. This step forms the basis for further analysis.
2. Loss analysis: the Product Write-off Report and subtotals
To determine loss amounts by each reason, use the dedicated analytical tool — the Product Write-off Report (Report → Product Write-off Report).
In this report, the user must first select an accounting centre (a store or warehouse) and specify the analysis period. The generated table provides comprehensive information about each written-off product: its name, write-off date, item number, barcode, quantity, retail price, total amount at retail prices and, most importantly for the owner, the cost price of the written-off product. The final column shows the company’s actual financial losses.
Totals by reason:
The main value of this report for the owner is that the system automatically groups written-off products by the same reasons (counterparties) specified when the documents were created. As a result, the report displays subtotals for each group.
You will see consolidated blocks such as:
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Total for the «Spoilage» group: 15 units with a total cost price of UAH 2,500.
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Total for the «Own needs» group: 5 units with a total cost price of UAH 450.
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Total for the «Damage» group: 3 units with a total cost price of UAH 1,200.
This visual grouping allows the manager to immediately assess the scale of the problem in a particular area and take appropriate management measures. For example, temperature control can be strengthened if the amounts in the «Spoilage» category increase sharply. The report can be printed or exported to Excel for further processing.
3. Grouping by product: how to consolidate identical items
Business owners are often interested not only in the chronology of write-offs but also in the total quantity of a specific lost material, such as the total number of metres of cable or kilograms of sugar written off during the month.
For this purpose, the report settings form includes the «Group by product» checkbox. When enabled, the report is reformatted: the dates of individual write-offs are hidden, while identical products are combined into a single row and their total quantity and value are calculated.
Interaction with other filters (for production users):
For businesses that use the production option, the report offers additional features, including displaying material write-offs for production acts or assembly operations. If the user attempts to enable both «Group by product» and «Group by production act» at the same time, the program will display an appropriate informational message and automatically disable the conflicting option, because simultaneously consolidating data by these two different entities is logically impossible.
Using counterparties as «Write-off reasons» together with the functionality of the «Product Write-off Report» gives the business owner full control over where products are disappearing from the warehouse. This makes it possible to separate justified expenses for the company’s own needs from direct losses caused by spoilage or damage, ensuring the correct calculation of net profit.
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