Meaning
Adjusting the account balance to account for missing merchandise during the receiving process identifies a variance between the shipped quantity and the physical count. Retailers apply a code 22 shortage deduction when the received units do not match the vendor invoice or packing slip.
Evidence Review
Proof of delivery documents signed by the carrier provide the primary defense against these claims. A code 22 shortage deduction remains valid unless the supplier provides a bill of lading showing the full piece count was loaded.
Operational Cause
Mislabeling of cartons often leads to scanning errors during high volume intake. When several items share a similar physical profile, a code 22 shortage deduction might appear alongside an overage for a different product. Warehouse staff might overlook a box on a mixed pallet or fail to record a split shipment.
This type of error is common when multiple purchase orders arrive on the same truck and the receiving clerk fails to separate the inventories correctly.
Margin Impact
Recurring losses from these adjustments erode the net profitability of the wholesale account. Because a code 22 shortage deduction is taken directly from the payment, the supplier must reconcile the open invoice to maintain accurate books.
