Size-Wise और Style-Matrix Inventory Shrinkage (GST ITC Mismatch Loss)

Definition

Wholesale footwear businesses managing multiple size runs (6–13 sizes per style) and style matrices (100–500 SKUs) across 5–50 outlets face critical gaps: (1) Manual stock transfers between locations are not instantly reflected in GST purchase records, creating unmatched inventory. (2) Size exchanges or customer returns logged locally but not synced to central billing create 'ghost stock.' (3) Damaged/defective stock held pending supplier claims but still counted in inventory creates false asset valuations. When GST audits reconcile GSTR-2B (supplier filings) with purchase invoices, these discrepancies trigger ITC denials (₹5,000–₹50,000 per audit finding). Additionally, physical inventory write-offs for shrinkage are not GST-compliant if not supported by proper documentation, leading to 18% tax exposure on loss value.

Why This Matters

The Pitch: Wholesale footwear retailers in India waste ₹50,000–₹500,000 annually per outlet on inventory shrinkage due to manual size-matrix tracking errors. Automation of barcode-linked, real-time size-run inventory synchronization with GST e-invoice records eliminates ITC mismatches and reduces shrinkage by 8–12%.

Affected Stakeholders

Store Manager (manual stock counts), GST Compliance Officer (ITC reconciliation), Warehouse Supervisor (inter-outlet transfers), Accounts Team (write-off documentation)

Related Business Risks