Inventory Adjustments Showing as COGS

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Posted on by AXEON Man

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So, I added a dedicated GOG Account for Inventory adjustments/shrinkage.

I listed that account in the general posting setup under "Inventory Adjustment Account"

If I post an inventory adjustment via the Item Journal or the Adjustment from within the Item Card, I get the same result -the COGS Account from the General Posting Setup is used and the inventory adjustment account is not.

I'd like to track shrinkage but it's difficult like this. What is the reason for a "Inventory Adjustment Account" in the General Posting Setup if this is the result?

Thanks.

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Dynamics 365 Business Central

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Jainam M. Kothari 15,732 Super User 2026 Season 1 on at

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Hello,

The Inventory Adjustment Account in General Posting Setup is only used for positive adjustments (inventory increases), while negative adjustments like shrinkage post to the COGS Account, as the system treats them as consumption.

If you want shrinkage tracked separately, you’ll need either a dedicated posting group for adjustments or a customization to redirect negative adjustments to your shrinkage account.

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Valentin Castravet 32,152 Super User 2026 Season 1 on at

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First, I would ignore the first answer as that user is posting AI generated answers that are incorrect. The system absolutely does not use different accounts for positive vs negative adjustments.

Second, I'm guessing something is wrong with your set up. The system uses the inventory adjustment account for positive or negative adjustments. Did you change the inventory adjustment account in the general posting setup page for the line that has an empty gen. business posting group? It would help if you posted screenshots.

Valentin Castravet
Work: Zander ERP Services
Blog: Dynamics 365 Business Central Insights
LinkedIn: www.linkedin.com/in/valentin-c-0500a247/

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AXEON Man 1,159 on at

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Fantastic!

I did not like the first answer, glad it was wrong -sure seemed like a software problem if it were true.

You nailed it with the empty General Business Posting Group line -I neglected to change it there. Just did and whamo, it works as desired!

I really appreciate that answer!

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OussamaSabbouh 12,803 Super User 2026 Season 1 on at

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Hello,

Inventory adjustments in Business Central uses inventory adjustment account in all cases (positive or negative) I think there is a problem in the setup.

Regards,

Oussama Sabbouh

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