GlossaryEN1 min readUpdated: Jun 22, 2026
Inventory variance
Warehouse managers and inventory controllers routinely encounter inventory variance: the gap between stock quantities recorded in the warehouse management system (WMS) and quantities confirmed by a physical count.
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Warehouse managers and inventory controllers routinely encounter inventory variance: the gap between stock quantities recorded in the warehouse management system (WMS) and quantities confirmed by a physical count. Typical causes include counting errors, theft, damage, spoilage, and data-entry mistakes at goods receipt or despatch. A one-off variance can usually be resolved with a system adjustment; recurring or widening gaps point to deeper process failures requiring root-cause analysis. In customs contexts — particularly bonded warehouses and inward processing regimes — unexplained inventory variance may attract scrutiny from customs authorities. Inventory variance should be distinguished from shrinkage, which refers specifically to losses through theft or damage, and from a write-off, which is the resulting accounting entry.
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