In logistics & warehouse operation the term "Write-Off" Stands for ?

A write-off is a deduction in the value of earnings by the amount of an expense or loss

This is considered a financial term in inventory management. This refers that some of the inventory that a company has; has no value any more.  It could be small as to inventory that has expired or if big then we are talking about a fire that happened to the warehouse.

 

The remaining inventory is written down and what has to be removed is written off.

In the standard SAP definition, postings for Scrapping/ Write-off in inventory management are made, if a material can no longer be used.  Scrapping / write-off may be due to when:   ·         The quality has been reduced due to prolong storage.   ·         Inventory has become out of date   ·         The material was damaged   ·         Product discontinuation   ·         Change in specification     At My Company, the SAP scrapping or write-off function is used to write-off loss in transit and for obsolete or scrapped stocks.

write off is removing surplus unusable, damaged,expired items from stock as expenses( debit) in stock value in accounting 

Write off refers to scrapping or clearing obsolete, discontinued or damaged stock from the inventory. When stock takes several years in inventory and there seems to be no more demand for them, it's advisable to clean up and creat space for fast moving items. Also, when a particular product line is no longer in production, and the items are no longer required, it's only prudent to write them off as they will not be used at all. Similarly, when items break or get damaged either during storage or transportation, the items are to be scrapped so that their value is written off from the stock/inventory values to reflect the actual value of usable items.

Write-off stands for deleting the stocks from warehouse inventory (For example aging or damage stocks removal from warehouse inventory)

An inventory write-off is an accounting term for the formal recognition that a portion of a company's inventory no longer has value. An inventory write-off may be handled in the company's books by charging it to the cost of goods sold or by offsetting the obsolete inventory allowance. Most inventory write-offs are small, annual expenses; a large inventory write-off (such as one caused by a warehouse fire) may be categorized as a non-recurring loss. If inventory still has some value, it will be written down instead of written off. Other items that companies commonly write off include uncollectible accounts receivable and obsolete fixed assets.

This term is used in ERP System to drop out or to make inventory reconciliation process.

Damaged items, quality defected items, scrap & item not in good condition by cause of accidents , climate will be taken in this account to close the inventory   

Scrape, waste or deduction not in the regular way of dispatching 

Inventory Write-Off represents inventory that no longer has any value in the business (as opposed to write down, where the inventory value has been reduced). Inventory could be written off due to technological obsolesce, theft or damage. Inventory Write-off is simply the value of the stock to be written off. It can be allocated to the Cost of Goods Sold account, but this will distort Gross Margin percentage. My suggestion is to isolate it by allocating it to a Write-Off account.

The Inventory Write-Off value reflects how much writing off inventory is costing the business. If the level is concerning, further investigation into why the write-off is necessary and corrective action may need to be undertaken.

Every growing business should have a process to identify slow-moving or non-saleable products, and consider scrapping or writing off some of those items to create room for more profitable products.

Simply, Write-off means, you are not using materials for further production or other requirement purpose. Than, the value of those materials will be deducted from earnings by the amount of an expense or loss.