Expired and spoiled goods: how to write them off

Any warehouse that handles food, medicines, cosmetics or household chemicals meets this question sooner or later: what should be done with goods whose shelf life has run out? Often they lie quietly behind a rack or in a separate box while the records still show them "in stock". In a revision such goods do not appear as a shortage, but they are no asset of the warehouse either: their value is zero or close to it. Writing them off promptly and properly brings the records closer to reality.

How it differs from a shortage

In a shortage the goods are missing: they are in the books but cannot be found on the shelf. Expired goods are physically there, they simply cannot be sold. Both make the booked value differ from the real value, but the causes and documents are different. For a shortage you look for an explanation and a cause, while for unfit goods you need a committee's conclusion, a report and the manager's decision. Do not mix the two: if unfit goods are written off as a "shortage", real losses become invisible too, because a small sum is lost inside a big one.

Steps of a write-off

1. Identification. During a revision or a scheduled check, set aside goods that are expired, spoiled, broken or have opened packaging.
2. Separation. Move such goods from the main stock to a separate zone with a "not for sale" label, so they are not sold by mistake.
3. Committee. At least two or three people (the storekeeper, the accountant and a person appointed by the manager) inspect the goods and note the item, batch, quantity and date.
4. Report. It states the name of the goods, batch, quantity, value, the reason they are unfit and the signatures of the committee members. A photograph is a useful addition.
5. The manager's decision. The manager approves the write-off and decides the further fate of the goods: return to the supplier, destruction or disposal.
6. Entry in the records. The accountant writes the goods off on the basis of the report. For tax and accounting questions, such as how the loss is recognised, consult an accountant or auditor.

Keep the write-off documents and photographs: if questions arise later, they will be the main evidence. Someone should also personally answer for date control, usually the storekeeper.

Control before the date passes

The best write-off is the one you never had to make. Two things help: the "first in, first out" rule (goods nearing their date go to the front, new goods to the back) and a weekly check of dates. List separately the items with less than two months of shelf life left and try to sell them through a discount, a promotion or an exchange with the supplier. Find out in advance whether your supplier contract has conditions for returns or exchanges.

Features by type of goods

With food, shelf life runs out quickly, so checks are needed daily or weekly, and the fridge temperature and the state of the packaging are taken into account. With medicines and cosmetics the batch and serial number matter: if necessary, you must be able to find and isolate exactly that batch. Chemicals should be stored away from other goods, and their disposal should be settled with a qualified specialist in line with safety requirements.

Common mistakes

• expired goods stay in the records for years;
• unfit goods remain "temporarily" on the main shelf and are sold by accident;
• the report does not give the batch and date;
• one person carries out the write-off, with no committee;
• expiry losses repeat year after year with no analysis of the cause.

A hypothetical example: in a dairy shop a revision finds that 40 packs of yogurt are past their date. If a pack costs 12,000 so'm, the total value is 480,000 so'm. The goods are put into a separate crate, a committee records the quantity and date, and the manager authorises destruction. After that the shop introduces a weekly table for checking dates, and the next quarter such losses are smaller.

Conclusion

Expired goods are not a shortage, but ignoring them distorts the records. Separation, a committee, a report and the manager's decision bring the records closer to reality, and date control reduces the losses themselves. If you need help putting stock in order and setting up a write-off routine, the Reviziya team can review your warehouse processes.