Calculate inventory shrinkage rate. Measure loss from theft, damage, etc. This tool helps you calculate, understand, and optimize this metric for your business.
The annual figure is the one worth sitting with: at this month's rate the shop loses about KES 456,000 a year to stock that left without being sold. Shrinkage is theft, damage, expiry, and mis-keyed sales in roughly that order of difficulty to fix, and you cannot tell which until counts are frequent enough to narrow the window.
Shrinkage is the gap between the stock your records say you hold and the stock a physical count finds. It is not one problem: it is theft, damage, expiry and mis-keyed sales bundled into a single number, in roughly that order of difficulty to fix.
Expressing it as a share of sales makes it comparable month to month and between branches. Expressing it annually makes it impossible to ignore, which is usually the point at which a shop does something about it.
You cannot tell which cause is dominant from one count. Counting more often narrows the window in which the loss happened, which is the only reliable way to separate a slow leak from a single event.
A clean count is worth checking rather than celebrating. If the book figure is routinely adjusted to match the count rather than the reverse, the number is meaningless. The person counting and the person able to edit stock records should not be the same person.
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