# Inventory Write-Off Approval Form Template > Source: https://netray.co/tools/inventory-write-off-approval-form-template > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer A signed record for scrapping or writing off damaged, obsolete or lost inventory, with value, reason and approvals. ## Category cost-finance ## Audience - Controller - Inventory manager - Plant manager ## Tool **Kind:** template **Output:** document **Fields:** #### Company **Key:** company **Type:** text **Default:** Acme Precision Ltd #### Form number **Key:** form_no **Type:** text **Default:** IWO-2026-087 #### Date **Key:** date **Type:** date **Default:** 2026-10-20 #### Site and warehouse **Key:** site **Type:** text **Default:** Plant 1, Main stores #### Primary reason **Key:** reason **Type:** select **Options:** - Obsolete or no demand - Damaged in handling - Expired or shelf life - Quality rejection - Cycle count loss - Engineering change **Default:** Obsolete or no demand #### Explanation **Key:** detail **Type:** textarea **Default:** Parts for a discontinued product family. No demand for 24 months and no open orders. Engineering confirms no alternate use. #### Total write-off value **Key:** total **Type:** text **Default:** 38,420 #### Disposal method **Key:** disposal **Type:** select **Options:** - Scrap for metal value - Return to supplier - Sell as surplus - Donate - Hazardous waste disposal **Default:** Scrap for metal value #### Expected recovery **Key:** recovery **Type:** text **Default:** 2,100 scrap value #### Expense account **Key:** gl **Type:** text **Default:** 5900 Inventory write-offs **Blocks:** #### Inventory Write-Off Request **Body:** Company: {{company}} Form number: {{form_no}} Date: {{date}} Site: {{site}} #### Reason **Body:** {{reason}} {{detail}} #### Items **Table:** **Columns:** - Part number - Description - Qty - Unit cost - Extended value - Lot / location **Rows:** #### Financial summary **Table:** **Columns:** - Item - Amount **Rows:** **0:** Total write-off value **1:** {{total}} **0:** Expected recovery **1:** {{recovery}} **0:** Expense account **1:** {{gl}} #### Disposal **Body:** Method: {{disposal}} Disposal witnessed by: ______________________ #### Checks before write-off **Body:** Confirmed no open demand or alternate use. Checked for customer-owned or consigned material. Hazardous or controlled items handled per procedure. ERP adjustment reference to be recorded after posting. #### Approvals **Signatures:** - Inventory manager - Engineering - Plant manager - Finance controller **Notes:** Set approval limits by value in your own policy. For controlled, export-restricted or customer-owned items, follow the specific disposal rules that apply. This form is a documentation starting point, not accounting or tax advice. ## Content **Intro:** Writing off inventory is a financial and control event: it reduces profit, removes stock records and, if done carelessly, hides shrink or fraud. A signed form that records what was written off, why and who approved it is the simplest control, and this template gives you one. **Sections:** #### How to use the form **Body:** Enter the reason, explanation and the total value in the fields, then list each part, quantity and cost in the items table. Print or export to PDF, add the engineering, inventory and finance signatures, and attach any supporting count sheet or inspection report. Record the ERP inventory adjustment or scrap transaction reference once posted. Keep the form with the month end close file for audit. #### Why the evidence matters **Body:** Auditors test write-offs because they affect earnings and can mask theft or poor cost control. Strong support shows the stock was real, unusable or unsellable, and that the value is correct. Typical evidence includes demand history, engineering confirmation of no alternate use, quality rejection records and photos for damage. Separate the reasons so you can see trends: handling damage points to warehouse practice, cycle count losses to process control, obsolescence to forecasting and engineering change management. **Bullets:** - Confirm no open orders or alternate use. - Check consigned and customer-owned stock. - Record disposal method and witness. - Post to a dedicated write-off account. #### Reserve versus write-off **Body:** Many companies carry an excess and obsolete reserve and charge write-offs against it rather than to expense, so the profit hit is taken earlier through the reserve. If you do this, the account on the form should be the reserve and the expense is recognised when the reserve is built. Make sure the reserve review and the write-off form use the same criteria for obsolete stock, otherwise they drift apart. #### Common mistakes **Body:** Frequent failures include writing off without checking open orders, scrapping material that could be returned to the supplier for credit, ignoring salvage value, and letting the ERP adjustment be posted before approval. Put the approval before the posting, and give the storeroom no ability to post large adjustments on its own. Review the log monthly for patterns. **Cta:** If you want slow-moving and obsolete stock flagged from ERP demand and usage history, Netray can discuss automating the candidate list that feeds this form. **Faq:** #### When should inventory be written off? **Answer:** When it is unusable, unsellable or lost, or when its net realisable value falls below cost and no recovery is expected. Common triggers are obsolescence, damage, expiry, quality rejection and count variance. Document the reason and approvals each time. #### Who should approve an inventory write-off? **Answer:** Usually the inventory manager, engineering or quality for technical judgment, the plant manager and finance. Higher values need higher authority, set in your policy. The person who handles the stock should not be the only approver. #### What is the difference between a reserve and a write-off? **Answer:** A reserve is an estimate of expected losses recorded before the stock is actually scrapped. A write-off removes specific items from the books. Write-offs are often charged against the reserve, so the expense was already recognised. #### Can scrapped inventory have a recovery value? **Answer:** Yes. Metal scrap, supplier returns and surplus sales can recover part of the cost. Record the expected recovery on the form and post the proceeds when received, rather than ignoring them. ## Search terms inventory write off form, inventory write-off approval template, scrap approval form, obsolete inventory write off request, stock write off authorisation form, inventory adjustment approval form, inventory disposal form --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json